Executives at Australia’s big four banks will face anger over funding fossil fuels this annual meeting season, with shareholder activists renewing efforts to force them to account for investments that increase global heating.
At their annual meeting on Wednesday, shareholders at Australia’s biggest bank, the Commonwealth, will consider a resolution lodged by activist group Market Forces that was aimed at stopping it from financing new fossil fuel projects or the expansion of existing ones.
Market Forces has lodged identical shareholder resolutions with the other three big banks – ANZ, NAB and Westpac – ahead of their meetings in December.
It has lodged similar resolutions every year since 2019 without success.
However, banks are under increasing pressure from regulators to act on climate issues.
In August, the Reserve Bank warned banks and insurers they may face legal action if they did not take action. The Australian Prudential Regulation Authority began surveying big banks, insurers and super funds about their management of climate-related financial risks in March, after issuing a regulatory standard on the topic last November.
Market Forces said that continued funding of coal, oil and gas by the banks was incompatible with their public commitment to reach net zero carbon emissions by 2050 and their support of the international Paris agreement, which aimed to limit global heating to 1.5C.
CBA said it will not provide finance for new thermal coalmines and will reduce its existing direct financing of thermal coal to zero by 2030. It also promised not to provide corporate finance to new clients who derive 25% or more of their revenue from thermal coal, and reduce that exposure to zero by 2030.
However, it will finance new oil and gas projects that are “in line with the goals of the Paris agreement”, and had a similar carve-out for new corporate lending.
David Grice, a CBA shareholder and retired CSIRO environmental scientist, said that if global heating could not be curbed modern civilisation would have to be put into “palliative care”.
“We’ve had a civilisation at the top of this peak that we’ve been able to maintain and now we’re about to drive it way beyond that top of that peak like two to three times beyond that peak.”
He said this would have devastating consequences for food production, which relies on a stable climate, as well as increasing the risk of fire and floods.
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“Any new infrastructure which they are funding adds to the carbon budget, which adds towards going towards two degrees. So you just can’t put anything more in.”
Will van de Pol, asset manager campaigner at Market Forces, said it was “unacceptable to a growing number of retail shareholders and institutional investors that Commonwealth Bank, ANZ, NAB and Westpac are exposing themselves to heightened risk by financing companies that are worsening the climate crisis”.
“The science is clear that we cannot develop new coalmines or oil and gas fields, yet Australia’s major banks are lending to companies doing just that, including Woodside, Santos, Whitehaven Coal and Glencore,” he said.
CBA has urged shareholders to vote against the Market Forces resolution.
The bank’s policies “appropriately manage financial and non-financial risk to the bank, support Australia’s energy security, support our customers in achieving their decarbonisation ambitions, and are aligned with our commitment to the goals of the Paris agreement,” it said in a notice to shareholders sent ahead of Wednesday’s meeting.