Activist group Market Forces flays CBA’s climate policy

Commonwealth Bank’s climate policy has attracted the wrath of activist group Market Forces, which will put up a shareholder resolution at the bank’s AGM.

Commonwealth Bank is under pressure to cut exposure to fossil fuels.

A spat has broken out between Commonwealth Bank and activist group Market Forces over CBA’s updated climate policy, with the bank accused of undermining its own existing commitments.

Market Forces said that, despite CBA’s pledge to achieve net zero emissions by 2050, the bank’s policy set “glide paths” for key fossil fuel sectors that were aligned with an International Energy Agency sustainable development scenario to achieve the target by 2070.

Glide paths, which are typically set at the sector level, set out short and long-term emissions targets for a bank’s financing activities.

The dispute comes only days after the Intergovernmental Panel on Climate Change warned that the prospect of limiting global warming to 1.5C would be out of reach within 12 years at current rates of greenhouse gas emissions.

Market Forces local campaigns co-ordinator Jack Bertolus said if the IPCC report represented a “kick in the teeth” for everyone who wanted a safe climate, CBA’s policy “made a mockery” of its own claim to be supportive of net zero by 2050.

“We’re living in a moment when we need to pull out all the stops to prevent catastrophic climate change, yet the first thing CBA does is aim for failure,” Mr Bertolus said.

CBA denied Market Forces’ assertions, saying it had had a productive exchange with the group while developing its new policy.

The IEA scenario, a spokesman said, was consistent with the Paris Agreement, and used the best, currently available data relied on by peer banks globally.

“In our annual report we have said that we will review our reference scenario within the next 12 months having regard to the availability and quality of data,” the spokesman said.

“We remain committed to playing our part in limiting climate change in line with the goals of the Paris Agreement and supporting the transition to net zero emissions by 2050.”

Market Forces confirmed a report in The Australian on Wednesday that it would put a shareholder resolution at CBA’s annual meeting calling on the bank to cease funding expansion of the fossil fuel industry.

The resolution would call for targets to cut CBA’s fossil fuel exposure, consistent with net zero by 2050.

Market Forces said CBA had also weakened its commitment to only funding new oil, gas and metallurgical coal projects if they were consistent with the Paris Agreement.

It said the commitment previously applied to all “banking and financing activity”, but now only applied to “project finance”, meaning the bank could fund such projects through corporate lending or other means.

The IEA report, according to the activist group, had made it clear there was no room to expand the scale of the fossil fuel industry.

“However, CBA’s latest policy update would allow it to maintain its track record of financing companies and projects that increase the size of the coal, oil and gas sectors,” Market Forces said.