Environmental Justice Australia today filed a case against the Commonwealth Bank of Australia in the Federal Court of Australia, on behalf of the Australasian Centre for Corporate Responsibility. The case seeks a declaration that shareholders have a right to put ordinary resolutions about the management of the company to the bank’s Annual General Meeting.
“This is an important test case about the rights of shareholders to put ordinary resolutions to company AGMs. If successful, it will provide an important new avenue for shareholders to promote corporate social responsibility,” said Felicity Millner, Director of Litigation, Environmental Justice Australia.
“Our client in this matter, the ACCR, have put a shareholder resolution to the Commonwealth Bank asking the bank to report on the bank’s financing of fossil fuels and exposure to risk from climate change. Commonwealth Bank have declined to put the resolution at the AGM. We will be arguing that the Corporations Act requires the bank to consider the shareholder resolution.” said Ms Millner.
“Australian law is unclear about whether shareholders have the right to put ordinary resolutions to company AGMs, expressing an opinion about the management of the company. Companies have been acting on the assumption that they do not. This case will set a precedent which will apply to future AGMs of listed companies in Australia. “ concluded Ms Millner.
“There are two kinds of shareholder resolutions: special resolutions, which require 75% support from shareholders and seek to amend the company’s constitution; and ordinary resolutions, which require 50% and can cover a broader range of issues. Because they avoid the need to change the company’s governance rules when shareholders simply want a single issue considered, ordinary resolutions are a much more practical and accessible way for shareholders to express their concerns about the company’s practices. “
“Climate change is clearly a risk that shareholders need to consider. The Commonwealth Bank should be giving its investors information to understand what it is doing in this important issue.” said Caroline Le Couteur, Executive Director of the Australasian Centre for Corporate Responsibility
“ACCR is moving this resolution so that shareholders and the wider community have access to the information they need to mange their risk.” she concluded.
Environmental Justice Australia are the environment’s legal team. We use the law to protect our environment, and we work to change our laws to make sure they protect our rights to clean air, clean water and healthy ecosystems.
The Australian Centre for Corporate Responsibility promotes just and sustainable corporate activity by encouraging ethical investment and facilitating informed shareholder engagement and advocacy.