Commonwealth Bank shareholders Guy and Kim Abrahams have discontinued their Federal Court proceedings against the bank for failing to disclose climate change risks in annual reports.
In the bank’s 2017 annual report, published less than a week after the Abrahams’ claim was filed, CBA’s directors advised shareholders that climate change was a material risk to the bank being able to execute its strategies.
In the 2017 annual report CBA promised to undertake climate change scenario analysis on its business in the upcoming year to assess the risk.
CBA’s change of heart came after eight months of legal correspondence between Environmental Justice Australia and the bank, culminating in EJA filing proceedings in the Federal Court on 8 August.
Guy Abrahams, one of the shareholders who brought the proceedings, said:
“After years opposing resolutions to improve climate change reporting and refusing to rule out participating in Adani’s Carmichael coal mine, the Commonwealth Bank’s directors have finally acknowledged the seriousness of climate change in the 2017 annual report.
“Cultural change within the bank has been remarkably slow – the threat of climate change has been evident for decades.
“We are pleased the Commonwealth Bank has said it will not fund Adani’s Carmichael coal mine and is taking its first steps in a business-wide review of climate risks.”
David Barnden, lawyer for the shareholders, said:
“The Commonwealth Bank has been a long-time laggard on telling its shareholders about climate risks, so this is an important change.
“Under the Corporations Act directors of Australian companies must give shareholders information about financial risks. CBA now acknowledges climate change is a material financial risk to the bank.
“The bank’s climate change policy, released the same day as the annual report, has been criticised for failing to phase out investments in industries like thermal coal that exacerbate climate change.
“Having acknowledged climate change risks, CBA must now implement a robust policy.”
The shareholders thanked Environmental Justice Australia, Grata Fund and barristers Ron Merkel QC, Emrys Nekvapil and Sarah Zeleznikow for their support.