Shareholders push for Australia's banks to stop fossil fuel funding

·3 min read
A pedestrian is reflected in the window of a branch of the Australia and New Zealand Banking Group (ANZ) in central Sydney

By Paulina Duran

SYDNEY (Reuters) -A group of shareholders filed climate change resolutions with three of Australia's Big Four banks on Thursday, asking them to abide by their self-declared support for net-zero emissions by 2050 and stop financing fossil fuels.

The resolutions ask for a firm commitment from Westpac Banking Corp, Australia and New Zealand Banking Group and National Australia Bank not to fund any fossil fuel projects, in line with calls by the International Energy Agency (IEA) https://www.reuters.com/business/environment/radical-change-needed-reach-net-zero-emissions-iea-2021-05-18.

The resolutions, filed by a group of about 100 shareholders, come ahead of the United Nations' COP26 climate talks in Glasgow, set to begin on Oct. 31, and as Australia regulators step up their scrutiny of climate-related risks and disclosures.

They are unlikely, however, to be officially tabled for a vote at the banks' annual general meetings in December, partly because of restrictions under Australian corporate law.

But backing for these types of resolutions is often acknowledged at meetings and support for similar proposals has risen in recent times.

Last year, shareholder support for similar resolutions tabled at the annual meetings of ANZ and NAB doubled to 28% and 26% respectively.

In one of the three matching resolutions, the shareholders say: "Despite committing to the climate goals of the Paris Agreement ... ANZ is aligning its investment practices and policies with the failure of these goals, resulting in our company falling behind rapidly evolving investor and regulator expectations, and the practices of other financial institutions."

Earlier this year, a group of investors managing $4.2 trillion, called on some of the world's biggest banks to toughen their climate and biodiversity policies or risk rebellions at their next annual meetings.

In a statement, ANZ said its thermal coal mining exposure had reduced significantly, while lending to renewables had increased. Exposures to oil and gas exploration and development has remained relatively flat.

The bank will update its Climate Change statement https://www.anz.com/content/dam/anzcom/shareholder/ANZ-Climate-Change-Statement-November-2020.pdf with new climate targets in the coming month, a spokesman said.

Westpac said it only finances emissions-intensive sectors in line with principles aligned with its climate change action plan https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/aw/sustainability/WBC-climate-change-position-statement-2023.pdf, adding that the bank would not "establish relationships with new thermal coal mining customers".

At end-March, mining accounted for about 0.75% of the bank's total loans and lending to oil and gas extraction represented 0.22%, the bank said.

NAB confirmed the resolutions had been tabled without commenting further.

A May report by the International Energy Agency said there should be no more new fossil fuel projects after this year for the world to reach its target of net zero emissions by 2050.

Australia, the world's biggest coal exporter and one of the world's largest carbon emitters per capita, has not signed up for that target, and this week approved its third coal mine extension in the past month.

(Reporting by Paulina Duran in Sydney; Editing by Simon Cameron-Moore and Richard Pullin)

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