Campaign group promises climate change resolution at Commonwealth Bank

Market Forces responds to beleaguered bank’s first climate statement

Australian environmental campaign group Market Forces says it will lodge a new shareholder resolution against Commonwealth Bank over its stance on climate change, piling pressure on the embattled bank which today announced the departure of its CEO.

As RI reported last week, the bank has rejected a lawsuit brought against it by two private investors claiming the bank’s 2016 directors’ report did not adequately inform investors of climate change risks

The bank today (August 14) issued its first ever climate change position statement in which it made a two-fold commitment to cut the emissions intensity of its lending and cut its own emissions.

It committed to financing A$15bn (€10bn) of low carbon projects by 2025, source renewable energy for 25% of its power needs by 2020 and reduce emissions per full time employee to 2.0tCO2-e.

On top of this it would use its environmental, social and governance (ESG) standards as a threshold across all lending decisions and complete a scenario analysis by the end of 2018.

But Market Forces, which is an affiliate of Friends of the Earth Australia and a member of the BankTrack network, branded the statement a “farce” and said it would take action by filing a resolution to be voted on by shareholders.

The campaign group released an analysis which it said showed that, since the bank made a pledge in 2015 to uphold the Paris Climate Agreement, it has poured A$6bn into the fossil fuel industry.“Commonwealth Bank is not even pretending to make an effort on climate change with the position statement released today,” said Market Forces Executive Director Julien Vincent. He said it “lacks either the interest or competency to fulfil its commitment to help hold global warming below two degrees”.

In its annual report, also issued today, the bank said it had arranged A$1.02bn of climate bonds during the year, including issuing a $650m climate bond, the largest Australian 
dollar climate bond by an Australian bank. Its lending exposure to renewable energy projects has grown to $2.8bn.

The bank said: “We recognise that our climate commitment needs to evolve and we will set new targets as we approach 2050. In order to inform this, we will undertake scenario analysis, in collaboration with leading experts, which will be completed by the end of 2018.”

General Manager of Corporate Responsibility Kylie Macfarlane said that the transition to net zero emissions by 2050 is a major priority that will be overseen by the board.

She said: “Our Climate Commitment represents a real statement of intent and provides us with a framework that will help us define the role we play in keeping global warming to well below two degrees in line with the Paris Agreement.” The statement would “iterate over time”.

Meanwhile, the bank also announced the departure of CEO Ian Narev, as it has become mired in a money laundering scandal. Just last week the board said it had “full confidence” in him.