Commonwealth Bank’s commitments to the Paris greenhouse targets came under severe scrutiny at the company’s annual meeting on Wednesday, with shareholders accusing the bank of diluting its climate policy to allow new lending to fossil fuel industries beyond 2030.
The board also attracted a protest vote on a resolution to top up the share right entitlements of managing director Matt Comyn.
Shareholders, including high profile activist Stephen Mayne, questioned the need to offer further incentives to Mr Comyn given that he already owned A$7 million worth of CBA shares and was in line to be granted another $10 million worth of scrip in coming years.
Mayne told the meeting that these were sufficient incentives to motivate the CBA boss to improve shareholder returns.
A handful of institutional shareholders agreed with Mayne’s argument and voted against the allocation of additional share rights to Comyn.
Around 140 million votes – accounting for more than 19 per cent of the shareholder poll – were cast against the resolution.
All other board resolutions put to the meeting were carried with at least 95 per cent support.
However, the heavy focus of the meeting was on the bank’s lending policies to fossil fuel industries, which appear to have been loosened in August.
CBA revealed changes to its policy in its latest “environmental and social framework” statement which confirms it would continue to phase out “project finance” to coal, oil and gas producers, but appears to create fresh wriggle room for the continuation of lending to such borrowers through corporate and trade finance lending contracts.
Under CBA’s previous environmental policy statement, the bank’s commitment to the Paris Agreement appears to have been more iron-clad and comprehensive:“We ensure our business lending policies support the responsible transition to a net zero emissions economy by 2050, by…only providing banking and financing activity to new oil, gas or metallurgical coal projects if supported by an assessment of the environmental, social and economic impacts of such activity, and if in line with the goals of the Paris Agreement.”
Market Forces, an environmental group lobbying Australian banks to curtail lending to the fossil fuel sector, argues that the policy change marks a watering down of CBA’s commitment to support net zero greenhouse emissions by 2050.
Bank chair Catherine Livingstone confirmed the rewording of the bank’s environmental lending framework in response to a question from Market Forces convenor Jack Bertolus, but she rejected suggestions that it represented a dilution of the bank’s support for meeting greenhouse targets under the Paris Agreement.
“What we have done is made sure that it’s very clear what we will and won’t do and that’s as much for our own bankers as it is for our external stakeholders,” the CBA chairperson told the online meeting.
“We have tried to be more transparent about what we are doing which is why we have distinguished between project finance, corporate finance and trade finance.“But I think we have made it clear that all lending is subject to assessment using our ESG assessment tool.
“So, again, I reinforce we are committed to the position we’ve taken