Shareholders of the Commonwealth Bank have put deforestation firmly on the bank’s agenda, with nearly 16% of votes cast in favour of a deforestation resolution at the bank’s AGM in Sydney.
The shareholder resolution, calling on the bank to disclose the steps it will take to become deforestation-free, was facilitated by ACF and SIX and co-filed by Australian Ethical, Ethinvest and 196 shareholders.
It gained the support of 15.92% of shareholder votes, representing more than $40 billion in shares. The result of this vote was not announced by CBA at its AGM, contrary to usual procedure, which baffled retail and institutional investors at the meeting.
Recent analysis by ACF has linked CBA’s loans and mortgages to properties where significant deforestation is occurring, affecting thousands of hectares of land.
Jolene George, ACF’s Head of Corporate Advocacy, addressed the AGM, saying a recent disclosure by the bank suggested up to 0.5% of CommBank’s total committed exposure — or around 32% of the bank’s lending to agricultural customers by ACF’s calculations — may be linked to deforestation.
“CBA still cannot tell shareholders whether the deforestation it has identified involves the destruction of threatened species’ habitat, whether it is potentially unlawful, or whether it is contributing to erosion and sediment runoff harming the Great Barrier Reef and therefore the economies dependent on that natural treasure.
“These are not peripheral questions. They go directly to the environmental, regulatory, reputational and financial risks the bank needs to understand and manage,” she said.
“The impacts from deforestation are almost certainly negative for the vast majority of your customers — perhaps with the exception of those doing the damage to increase their short-term profits.
“On behalf of shareholders I urge the board not to look away from this issue… identifying the risk is an important first step. The next step is to demonstrate how the bank will meaningfully address it.”
CBA shareholder Martin Mansfield told the AGM the bank’s approach to deforestation had been woefully inadequate. “We cannot continue the way we are. If we do, nature will collapse and, therefore, so will our economy,” he said.
Bonnie Graham, Impact and Ethics Analyst at Australian Ethical, said “It’s time for CBA to take meaningful action on deforestation. CBA acknowledges the agriculture sector’s significant nature related risks yet continues to increase its lending to landholders driving deforestation. This is a contradiction it can no longer afford to ignore, and shareholders have a right to ask for greater transparency and action.”