ACCR has lead the shareholder campaign to force our big 4 banks – CBA, NAB, ANZ and Westpac – to tell shareholders how much carbon exposure is in their finance. Our campaign has had a considerable impact – ANZ’s carbon situation was even the lead business story in The Australian on the day of the AGM. The campaign started with our research report into ‘Financed emissions, ‘unburnable carbon’ risk and the major Australian banks’. You can download it here. Our research shows that ANZ and the Commonwealth Bank have the highest level of carbon exposure and have clearly taken a very short term view of the risks.
Our resolution about climate change disclosure at the 2014 Commonwealth Bank of Australia 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 acknowledgment 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 the2014 ANZ AGM where again it forced the board to acknowledge carbon as an issue and improve disclosure although still not to the level of Westpac (which remains the leader in carbon disclosure). Our resolution received 2.95% of the vote. We asked questions at the NAB and Westpac 2014 AGMs. For more details see here. Earlier in 2014 a resolution was moved by 161 shareholders associated with the Wilderness Society at the Santos AGM on 16 May 2014. The resolution proposes Santos abandon its $1 billion-plus investment in coal seam gas resources around Narrabri in NSW. It gained 0.78% support from shareholders and significant press coverage.
Other Australian Shareholder Advocacy
Also in May 2014 ACCR moved a resolution at the Bougainville Copper AGM. During this century there have been 11 environmental or socially focused shareholder resolutions put at AGM’s of the top 200 ASX companies. Out of 11 resolutions lodged 1 was withdrawn, the company refused to put the resolution on the notice of meeting in 3 cases, 7 resolutions were considered by shareholders. Of those seven resolutions average shareholder support was 8.7%. However no resolution was put multiple years in a row as is standard US practice and no resolution was sponsored by a church or religious group.
Climate Change Advocacy in the US & UK
Shareholders in USA and UK have been campaigning about climate change for years. In January 2015 as a result of a long campaign, Shell has supported a shareholder resolution filed by a coalition of major investors about the risks associated with climate change. Co-filers ShareAction and ClientEarth helped the Aiming for A coalition coordinate the filing of the resolution at Shell. The same group, which includes major investors, asset managers and insurers, has also filed a similar resolution with BP. The resolutions call on BP and Shell to transparently:
Stress-test their business models against the requirement to limit global warming to 2ºC, as agreed by governments at the UN Climate Change Conference in 2010;
Reform their bonus systems so they no longer reward climate-harming activities
Commit to reduce emissions and invest in renewable energy.
Disclose how their public policy plans align with climate change mitigation and risk
ExxonMobil is the largest U.S. energy company. For many years Exxon Mobil was a major funder of global warming denier groups. ICCR members filed resolutions requesting the company either cease such funding or publish the identity of beneficiaries and amounts provided. Eventually, when support reached over 25%, the company pledged to cease such funding. In 2014 as a result of shareholder resolution Exxon Mobil has agreed to publish a Carbon Asset Risk report on the Company website describing how it assesses the risk of stranded assets from climate change. For more about this read here. Currently a group of Mobil Exxon shareholders is saying that profits should be returned to shareholders and not reinvested in more oil exploration.
Other US energy companies have had similar campaigns.
In the USA, in 2014, 24% of Bank of America’s shareholders voted in favour of the bank reporting about their climate risk and many other financial institutions have agreed be more open to their shareholders on this issue. In 2015, there are 87 USA shareholder resolutions about climate change – see http://www.ceres.org/investor-network/resolutions. Together with the political and civil society actions on climate change, shareholders are making a difference. One of the dominant forces in climate shareholder activism in the US has been the work of the Sisters of St Dominic. They authored and supported a pro-forma resolution, which has been put to numerous companies, ‘to adopt quantitative goals, based on available technologies, for reducing total greenhouse gas emissions from the company’s operations’. In 2011, eight companies (ConocoPhillips, Dominion Resources, Portland General, Kimco Realty, Lennar Corp, Ryland Group, Norfolk Southern and Exxon Mobil) had ‘industry customised’ variants of this resolution placed on their AGM: average shareholder support was 18.6%. (sourced 4/1/2024 from Wayback Machine https://web.archive.org/web/20150301081908/http://www.accr.org.au/advocacy)
ACCR has had a successful 2014 campaign to force the big Australian anks to disclose how much carbon they finance. All 4 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 the 2014 AGM season. NAB committed to increased disclosure, and to work with the other 3 big banks towards additional disclosure.We asked questions at both the Westpac and NAB 2014 AGMs.Our resolution about climate change disclosure at the Commonwealth Bank of Australia 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 acknowledgment 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.