Legal battle to unearth Commonwealth Bank's fossil fuel interests fails
At the Commonwealth Bank's AGM, The Australasian Centre for Corporate Responsibility pushed for details on the bank's fossil fuel interests. After the Commonwealth Bank refused, the ACCR has taken the case to court in a bid to put pressure on larger companies to be more transparent in their actions towards tackling climate change.
A push to get Commonwealth Bank to reveal details of its fossil fuel interests has failed after the federal court ruled shareholders do not have the right to ask other shareholders to vote on such issues.



The Australasian Centre for Corporate Responsibility, a Commonwealth Bank shareholder, attempted to put an ordinary shareholder resolution to the bank’s annual general meeting, asking it to report on the amount of greenhouse gas emissions it finances.

Commonwealth Bank refused to put the resolution to shareholders in this form, prompting the ACCR to take the case to court in the hope of creating a precedent that would put pressure on large companies to account for their actions in areas such as climate change and human rights.

But federal court judge Justice Davies dismissed the claim on Friday, ruling Commonwealth Bank’s constitution makes clear the “management of the company is vested exclusively in the directors” which precludes shareholder power to pass resolutions that offer opinions on the way the board operates.

At its AGM last year, Commonwealth Bank’s chairman David Turner said climate change was one of the top two issues for the bank. The company has said mining represents 1.5% of its total lending but has refused to provide more comprehensive details.

The ACCR, which has campaigned for banks to disclose their fossil fuel interests, said it is considering appealing the judgement.

“We brought this important test case because, in an age of increasing corporate power, it is more and more important that shareholders can hold corporations accountable for their actions,” said Caroline Le Courteur, head of the lobby group.

“It is disappointing that the decision has left Australia far behind other developed countries such as the US, the UK, New Zealand and Canada, where shareholder resolutions are an accepted, healthy part of corporate culture and where they have proven capable of bringing about real change.”

Felicity Millner, director of litigation at Environmental Justice Australia, which took on the case, said: “As a result of this case, it will be harder for shareholders who own and ultimately control companies to hold the company accountable for harming the environment, abuse [of] human rights or … other conduct that isn’t in the best interests of their shareholders or the community.”

Meanwhile, Commonwealth Bank has come under fresh pressure not to finance the controversial Abbot Point port expansion near the Great Barrier Reef – this time from its own staff.

An anonymous survey of 138 branch staff by the Australian Youth Climate Coalition found 73% said they would oppose the bank financing the port expansion.

Around a dozen international banks have ruled out providing capital for the project, which would allow tens of millions of tonnes of freshly-mined coal to be shipped via the reef to countries such as China and India. However, none of the ‘big four’ Australian banks have distanced themselves from the development.

The AYCC approached staff in Commonwealth Bank branches and asked them to fill in the survey. A further six in 10 staff agreed the thermal coal market is in “structural decline”.

“Commonwealth Bank staff, like most people in the community, don’t want to see our Great Barrier Reef put at risk by dangerous coal ports,” said Kirsty Albion, national director of the AYCC.

According to figures released in May, Australia’s largest banks have committed 10% of their known loan arrangements to the financing of risky fossil fuel projects that may become “stranded” if the world is to avoid disastrous climate change.

A Commonwealth Bank spokesman said: “We welcome the participation of shareholders and other groups in CBA’s annual general meetings, and balance it with the need to run such meetings effectively.

“We are pleased with the court’s judgment today as it confirms that we acted in accordance with the law as we put forward the only properly constituted resolution proposed by ACCR to the 2014 annual general meeting. The judgment also supports our approach to the participation of shareholders in annual general meetings.”

