The Commonwealth Bank’s first climate policy statement has been criticised by environmental groups and sparked one group to lodge a shareholder resolution to force the company to implement its stated commitment to the Paris agreement.
The bank released the statement, saying it was “reaffirming our support for a responsible global transition to a net zero emissions economy by 2050”.
It comes as the bank faces court action from two shareholders, suing it over allegedly inadequate climate-risk disclosure, and just days after it announced it would not be lending to Adani’s Carmichael coalmine. Adani said the statement simply reflected its own decision not to approach any Australian bank.
The short climate statement released by the bank follows a sustained campaign from environmental groups, who have attacked the bank over its previous failure to rule out financing the Adani coalmine, and its status as the country’s biggest lender to Australia’s fossil fuel industry in 2016.
The bank announced it would decrease the greenhouse gas pollution caused by its lending, as well as by its own business activity, but it didn’t provide details of how it would do so, or provide targets.
The Commonwealth Bank also committed to adopting the recommendations of the Taskforce on Climate-related Financial Disclosures, which means it will begin reporting all its direct and indirect greenhouse gas emissions, and include it in its financial filings, meaning they will be fully audited.
“Commonwealth Bank is not even pretending to make an effort on climate change with the position statement released today,” said Julien Vincent, the executive director of the environmental campaign group Market Forces.
He said they would lodge a shareholder resolution against the Commonwealth Bank on Wednesday, which would embed in the bank’s constitution its stated commitment to keeping global warming at less than 2C and force it to implement that commitment in the bank’s management.
“Unlike the bank’s peers in Australia and overseas that are taking concrete steps to avoid the most carbon intensive sectors, Commonwealth Bank clearly lacks either the interest or competency to fulfil its commitment to help hold global warming below two degrees,” Vincent said.
Vincent said the climate statement would allow the Commonwealth Bank to assist the fossil fuel industry to expand in Australia.
Unlike some recent announcements by other big four banks in Australia, the Commonwealth Bank did not put any limits on the sort of coal projects or coal-fired power stations the bank might lend to, making them the only one of the “big four” banks to not put some restrictions on lending to coal.
“We can’t allow a situation to continue where Australia’s biggest company continues to finance a massive fossil fuel industry expansion while feigning interest in a safe climate future,” Vincent said. “That’s why we’re moving a resolution that would embed climate change risk management into the heart of Commonwealth Bank.”
The bank’s statement said it would finance $15bn of “low carbon” projects by 2025. Despite being Australia’s biggest bank, that puts it significantly behind some of its competitors, and behind all of them on a pro-rata basis, Vincent said.
Vincent said he did not expect the bank to immediately release a policy that was consistent with its stated commitment to limiting global warming at less than 2C.
“We know it would take a couple of iterations,” Vincent said. But he was surprised that they were so far behind the other big four banks.
Kylie Macfarlane, Commonwealth Bank’s general manager of corporate responsibility, said the transition to net zero emissions by 2050 is a major priority for the bank, which will be overseen by the board.
“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,” she said. “This is our first climate policy position statement, and it will iterate over time. The scenario analysis will ensure that our decisions are grounded in science and economics.”
Blair Palese, the chief executive of 350.org Australia, said the bank’s statement was a step back from what they were led to believe would be released in earlier discussions.
“It’s worse than what was discussed with environmental groups previously and far less than the commitment of other banks,” Palese said. “There are no specific commitments to reducing or phasing out coal or fossil fuels more generally at a time [when] that is what Australia needs from banks and investors. Overall, a fail on their part to show leadership.”
Greenpeace said the statement “will do nothing to restore the bank’s tattered reputation”.
“A climate policy that doesn’t mention coal or fossil fuels is not a climate policy at all,” Greenpeace campaigner Jonathan Moylan said. “The Commonwealth Bank commit in their policy to support a transition to net zero emissions by 2050 but then make a mockery of that promise by failing to outline any significant measures to achieve that goal.”
