MEDIA RELEASE: Wednesday 10 August 2022
Environmental finance campaigning organisation Market Forces has responded to Commonwealth Bank of Australia’s latest climate report and targets with a shareholder resolution, calling on the bank to ensure its financing no longer enables the expansion of the fossil fuel industry.
The Commonwealth Bank (CBA) today published its annual report, climate change report and targets for its future ‘financed emissions’. While the bank’s new targets fall short of aligning to a 1.5ºC global warming limit, a more pressing concern is the bank’s ongoing willingness to finance companies and projects expanding the scale of fossil fuels.
The International Energy Agency and other analysts have made clear that to keep global warming to 1.5ºC, there can be no further expansion of the fossil fuel industry. However, CBA’s policy settings allow it to continue financing new oil and gas projects, and the companies pursuing them. Companies expanding the coal industry are also eligible to receive finance under the bank’s current policy settings.
In the past year CBA has financed several companies pursuing expansionary fossil fuel projects, including Origin Energy and Beach Energy. Recently CBA was reported as arranging a loan for Santos, which is pursuing several new fossil fuel projects as it aims to increase oil and gas production by at least 17 per cent this decade.
A shareholder resolution coordinated by Market Forces on behalf of over 200 shareholders at CBA’s upcoming Annual General Meeting (AGM) calls on the bank to demonstrate how “the company’s financing will not be used for the purposes of new or expanded fossil fuel projects”.
Market Forces Executive Director Julien Vincent said:
“Sound action on climate change starts with getting the basics right. The fact that financing from Commbank still enables companies to expand the scale of the fossil fuel industry is a fundamental failure that needs urgent correction.
“On the same day as Commonwealth Bank’s latest targets are released, it is acting as a mandated lead arranger for a loan to Santos, a company attempting to increase oil and gas production at least 17 per cent this decade. Santos’ business strategy is consistent with the abject failure of the Paris Agreement.
“Setting targets to decarbonise its portfolio by 2030 is important, but decisions made in the next few months and years are far more so.
“If CBA and other banks allow companies to lock in billions of tonnes more greenhouse gas emissions before exiting those relationships, these institutions will leave a trail of climate damage in their wake. Finance that enables the expansion of the fossil fuel industry needs to stop now.”
“Glide paths”
CBA published targets for its financed emissions from power generation, upstream oil, upstream gas and thermal coal mining. While the thermal coal mining target confirms the bank’s commitment to phase out exposure to the sector by 2030, the remaining targets are either based on scenarios where emissions fail to reach net-zero by 2050, or allow the bank to increase its exposure to financed emissions between now and 2030.
The bank’s target of 105 kg CO2/MWh is based on a scenario for OECD countries where net-zero emissions is reached by 2070, 20 years later than the bank’s own commitment. While the bank’s financed upstream oil and gas emissions have fallen significantly from 2020 to 2021, CBA is using this to justify increasing its exposure to upstream oil emissions by 12 per cent, and upstream gas financed emissions by 22 per cent by 2030.
“It’s disappointing Commbank’s view is that, having achieved some positive declines in its financed emissions over the last year, this is taken as a licence to increase its exposure to carbon pollution from oil and gas in the coming eight years.
“We need to pull out all the stops to keep global warming under control. The notion that CBA could increase its financed emissions in oil and gas over the rest of this decade is tone deaf to the urgency of the climate crisis,” said Mr Vincent.
The shareholder resolution and supporting statement filed with Commonwealth Bank of Australia can be found here.