Commbank has today released its notice of annual general meeting. They have devoted an entire three pages out of the fifteen substantive pages of the document defending their woeful climate change policy and multi-billion-dollar support for fossil fuels. This is despite the fact that they also had to address their money-laundering lawsuit and the fact that the shareholders could – for a second year in a row – vote down the executive remuneration package. That would lead a process where non-executive directors could be forced to stand for re-election.
What that demonstrates is how effective you all have been in keeping Commbank’s climate crimes front and centre – take a bow.
There is a lot of spin in this document, which will not go unnoticed by Commbank’s institutional investors who (in general) are highly literate on climate and energy issues, and more so than Commbank’s senior management.
What is Commbank’s climate commitment?
Commbank says they have committed to “decreasing the emissions intensity of our business lending”. As anybody who has set objectives knows, this is meaningless because there are no numbers or dates in that commitment. Decrease by how much? By when? Commbank doesn’t say – so this commitment is more of a marketing tactic than a genuine policy. Commbank’s climate policy is worse than the other big four banks and although fourteen banks globally have ruled out funding for new thermal coal mines, Commbank has not.
What is Commbank’s track record?
Commbank makes a big deal out of the fact that their direct lending to coal mining has reduced by 79% since 2012 and their exposure to renewable energy has grown to $2.8 billion over the same period. What is so significant about 2012?
2012 was the peak of the mining construction boom. The value of the coal industry has dropped by more than 79% over that same period. It would be very surprising if Commbank’s lending to coal mining hadn’t reduced by that much during that period.
As far as the renewable energy exposure goes, Commbank’s total exposure to fossil fuels stands at $10.5 billion – 3.75 times higher than their exposure to renewables. Trillions of dollars of investment in renewable energy are required globally in order to meet the Paris commitment to keeping warming to well below two degrees, and Commbank are one of the fifteen largest banks in the world. Given that JP Morgan recently announced that it would facilitate $200 billion in clean financing by 2025, Commbank’s exposure to renewable energy is small cheese, embarrassing, and nothing to be crowing about in a glossy investor presentation.
Interestingly Commbank have not made any commitments on advocacy, and have no land-grabbing policy, which means they are happy to profit by violating the rights of indigenous people.
What about Commbank’s claims on stakeholder engagement?
Commbank claims in this presentation that “The Board values engagement with all Company stakeholders and looks forward to continued engagement on our Climate Policy Position Statement.” That is completely contrary to the experience that Greenpeace and other environment groups have had with Commbank, who have been cancelling meetings, proposing irrelevant engagements and generally obfuscating. Commbank’s shareholders need to know that the bank has broken its relationship with Australia’s leading environment groups.
What does Commbank have to say about the shareholders special resolution on climate change?
A group of shareholders coordinated by environmental finance group Market Forces have lodged a special resolution (Item 5) that proposes to amend Commbank’s constitution in order to explicitly make the requirement to hold global warming to below two degrees an obligation of directors. You could argue that the Item 5 resolution should not be necessary, since mitigating climate risk is already a fiduciary duty for company directors under the Corporations Act. Nevertheless, Commbank’s behavior over the past two years has made it obvious that the existing legal requirement is not enough.
Commbank’s board recommended that shareholders vote against that resolution. The logic behind that was that they claimed that they already take climate change seriously and has adopted a policy committing the company to ambitious action on climate change (as explained before, they have not) and that it is not appropriate for climate change to be given a higher priority than other issues that the bank’s directors need to consider. Clearly that makes no sense. Climate change is the greatest moral, ecological and financial crisis we face. It would be very poor management indeed for climate change not to be given a higher priority than other issues.
You’re having an impact!
The fact that Commbank had to go to such lengths to defend itself, and then fall flat on its face, shows how much impact your efforts are having, together with over 100,000 other people who have been part of this campaign. It also means they realise climate change will be a major issue at their AGM. They’re right.
So what can I do now?
If you are a Commbank shareholder, you will receive voting forms and information about the AGM in your mailbox in the next couple of business days. Two really helpful things you can do are to vote in favour of the climate change resolution (Item 5) and also to fill in the form where you can ask a question of the Board asking why they have not ruled out lending to fossil fuels. The more responses focus on a particular issue, the more attention that issue will get at the AGM. Please get in contact with us if you’d like to participate in Commbank’s AGM!
Otherwise, head on over to Commbank’s social media pages and ask them why they haven’t ruled out lending to fossil fuels. And if you haven’t already, join more than 100,000 people who have signed the petition to get Commbank to rule out new coal projects!