Big Banks

CLIMATE – BIG BANKS

Shareholders in the big 4 banks – CBA, NAB, ANZ and Westpac – along with Australia’s over 11.5 million superannuation members whose funds almost certainly invest in the big 4 banks, have a right to know if their banks are invested in ‘unburnable carbon’, what the associated risks are and how they intend to manage them.

Based on our research into the carbon exposure of the big four banks, ACCR put forward resolutions asking:
“That, each year at about the time of the release of the Annual Report, at reasonable cost and omitting any proprietary information, the Directors report to shareholders their assessment of the quantum of greenhouse gas emissions we are responsible for financing calculated, for example, in accordance with Greenhouse Gas (GHG) Protocol guidance.”

Banks finance greenhouse gases through loans, direct investments, wealth management funds, insurance and superannuation. The amount of greenhouse gases banks finance is significantly greater than that emitted by the banks operations.

 

Big Bank campaign 2014

ACCR ran a successful campaign in 2014 to force the big Australian banks to disclose how much carbon they finance. All four banks have improved their disclosure as a result. For a summary of the campaign see this Crikey article or this summary by ACCR.

  • CBA has undertaken to disclose the carbon emissions initially from their lending to the energy sector and then all their lending. It disclosed more information about its fossil fuel mining lending in response to a question at the AGM.
  • NAB has disclosed how much of its lending to the mining sector is to fossil fuels. NAB has also committed to facilitating collaboration with other Australian banks to disclose more.
  • Westpac has disclosed how much of its lending to the mining sector is to fossil fuels as well as the carbon intensity of its infrastructure and utilities portfolio. It appears still to be the least carbon exposed of the big 4 banks and makes the most comprehensive disclosures.
  • ANZ has disclosed the emissions intensity of its power generation lending.

This additional information means shareholders can start comparing banks fossil fuel performance using facts not guesses. Now that both Westpac and ANZ have disclosed the emissions intensity of their power generation portfolio shareholders can see that for this part of their portfolio Westpac has a significantly lower carbon intensity than ANZ. We expect other banks will be forced to move to more disclosure rapidly from sustained public, regulatory and shareholder pressure.

This additional disclosure is a result of our report on the big banks, shareholder and community action. The best disclosure so far is from Westpac, both before and after the 2014 AGM season. NAB committed to increased disclosure, and to work with the other three big banks towards additional disclosure.

We asked questions at both the Westpac and NAB 2014 AGMs.

Our resolution about climate change disclosure at the CBA AGM lead to the chair of CBA saying that climate change was one of the two big issues facing CBA. This is a long awaited acknowledgement by one of Australia’s biggest banks that climate change is an issue. Our resolution got 3.2% of the vote.

We lodged a resolution at the ANZ AGM where it forced the board to acknowledge carbon as an issue and improve disclosure. Our resolution received 2.95% of the vote.

 

Big Bank campaign 2015 – resolutions lodged with ANZ

ACCR updated our research on the big banks in September 2015. We found that as a result of the 2014 big bank campaign all banks improved their disclosure ANZ at that time, appeared to be the most exposed bank with the weakest climate change policies.

You can see our research update here.

ACCR, together with 100 plus shareholders from Market Forces, Ethinvest and Tas Ethical, lodged resolutions to be debated at the ANZ AGM on 17 December 2015.
The resolutions had 3 parts asking ANZ to:

  • make it easier for shareholders to move resolutions.
  • ask ANZ to provide more information about how much it is exposed to carbon-intensive industries.
  • set public targets for reducing ANZ’s exposure to carbon intensive industries.