CBA to consider climate vote next year

The lender could become the first major Australian bank to allow a non-binding shareholder vote on climate reporting

CBA to consider climate vote next year

Commonwealth Bank could become the first major Australian bank to allow a non-binding shareholder vote on climate reporting.

CBA said it would consider the initiative for next year’s annual meeting, according to a report by The Australian. Bank chair Catherine Livingstone made the commitment at Wednesday's virtual annual general meeting. Climate-related issues dominated the meeting despite the bank’s support for net-zero emissions by 2050, according to The Australian.

The move comes after a shareholder resolution was lodged in August calling on CBA to end the financing it provides to the fossil fuel sector. The resolution was put forward by climate activist group Market Forces, which lodged similar resolutions last week with Westpac, National Australia Bank and ANZ.

Addressing the resolution, Livingstone said that directors recognised the level of interest in CBA’s approach to managing climate change.

“I can also confirm to shareholders that the board will give consideration to a non-binding vote on our climate change report at the next AGM,” she said.

While Market Forces has lodged resolutions with all of the big four banks, it has a particular issue with CBA over the lender’s use of an International Energy Agency scenario consistent with net-zero emissions by 2070 rather than 2050, The Australian reported. CBA said it would update the scenario after the IEA’s next data drop, which came shortly after the end of the AGM.

Market Forces representative Jack Bertolus said at the meeting that CBA was “walking back” a policy that would bar it from funding new fossil fuel projects. He said the resolution was lodged to stop the bank from funding companies where the use of the proceeds was “explicitly intended for new fossil fuel projects.”

Read more: Shareholders call on major banks to cut fossil fuel financing

Market Forces also called for the introduction of targets to cut fossil fuel exposure to be consistent with net-zero by 2050, The Australian reported. While the resolution wasn’t formally considered, a proxy count showed 14.4% of shareholders were in favour.

Livingstone said that the bank had used a reference scenario consistent with the Paris Agreement in preparing “glide paths” for its exposure to fossil fuels.

“It uses what we believe is the best currently available data, and has been relied upon by a number of peer banks globally,” she said. “In our annual report, we have said we will review the ongoing suitability of that reference scenario within the next 12 months, having regard to a number of important factors, including the availability and quality of data.”

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