Billionaire activist Chris Hohn targets big four banks

UK hedge fund billionaire Chris Hohn has Australia’s big four banks in his sights over climate change.

Activist investor Chris Hohn. Picture: Bloomberg

Hedge fund billionaire Chris Hohn has Australia’s big four banks in his sights.

The British executive turned climate activist, founder of the $US30bn The Children’s Investment Fund Management, is pressuring companies to properly divulge their carbon exposure and give shareholders a vote on their climate plans through his Say On Climate pledge.

The CIFF initiative is run locally via the Australasian Centre for Corporate Responsibility and aims for an annual disclosure of emissions, a strategy to reduce emissions and an annual vote on the plan at the company’s annual general meeting.

Mr Hohn has already landed a couple of early wins with big Australian resources operators including Santos, Woodside Petroleum and Rio Tinto agreeing to an advisory vote on climate reporting.

Now the heavyweight is using the sway of his $US6bn philanthropic Children’s Investment Fund Foundation to target some of the biggest financial institutions in the world including Australia’s big four banks.

“I don’t think banks are disclosing the emissions intensity of their loan book,” Mr Hohn told The Weekend Australian.

“They are lending to any and all without having the respective information - they don’t have the data because they don’t collect it. You know what’s going to happen - the regulator is going to see this, the central bank regulator, and say climate change does matter and an uncontrolled liability in the banks isn’t good and I’ll regulate it. That’s one thing that’s going to happen in due course. The other factor is shareholders want to better know their liabilities.”

Mr Hohn said he expected to engage with Australian banks by the end of 2020.

“CIFF is finalising an additional Say on Climate resolution for banks and will file on the largest banks in the world. There is a carbon framework – the Partnership for Carbon Accounting Financials - already developed and accepted for banks to disclose. So the largest Australian banks will have a filing within this year,” Mr Hohn said.

Santos on Tuesday said it will provide shareholders with a non-binding advisory vote on its climate change report at the annual general meeting following meetings with investors, while Woodside on Friday also agreed to the vote at its 2022 AGM. Oil Search, an oil and gas producer with operations in Papua New Guinea and Alaska, is also on Hohn’s radar.

“We will continue to engage with shareholders in 2021 to inform the content of Woodside’s climate reporting ahead of the non-binding shareholder vote in 2022, and on the risks and opportunities for Woodside arising from the energy transition,” Woodside chairman Richard Goyder said on Friday.

Both Santos and Woodside have been under pressure from green groups including the Australasian Centre for Corporate Responsibility to boost transparency on climate reporting and allow annual non-binding votes by shareholders.

Rio Tinto and Glencore have also vowed to put their climate goals to a shareholder vote following Hohn’s activist campaign.

New Rio boss Jakob Stausholm told The Australian in February the world had changed since its last annual shareholder meeting - when almost 37 per cent of votes backed a resolution calling on the company to match promises made by its major competitors on scope-three emissions - even though the Rio board rejected the motion and told shareholders the push was “not viable”.

Rio on Friday accepted two shareholder resolutions by Market Forces and ACCR respectively calling for it to disclose short, medium and long-term targets for its scope 1 and 2 greenhouse gas emissions along with performance against those goals while boosting an annual review of industry associations.

“As Rio Tinto’s current approach is substantially consistent with both of the proposed resolutions, the Rio Tinto Board is recommending that shareholders vote in favour of these resolutions,” Rio said

Originally published as Billionaire activist Chris Hohn targets big four banks