Climate activists to call ANZ to account over fossil fuel funding at AGM

Tuesday, 5 November 2024

The ANZ bank in Australia is being targetted by Market Forces, a small but insistent activist group of shareholders demanding less funding of oil and gas concerns.

For the fifth year in a row, Australian environmental activist group Market Forces has submitted resolutions to an upcoming ANZ annual meeting aimed at putting the bank’s feet to the fire over its climate actions - or lack thereof.

Market Forces, which owns 0.01% of ANZ’s ordinary shares on issue, has asked that shareholders consider inserting two resolutions into the ANZ constitution on December 19, when the bank’s annual meeting will be held. One of these requests asks that shareholders “recognise the substantial transitional and physical risks of climate change and their potential financial impacts on the company”.

All banks are being scrutinised for the money they lend to oil and gas companies and projects - with direct lending becoming less common, and funding through bonds and corporate lending more popular.

The report goes on to say: “noting our company’s expectation that customers in the ‘energy sector’ have a transition plan in place by October 2025, shareholders request further disclosure addressing 1) Whether ANZ will require all ‘fossil fuel companies’ to have climate transition plans in place by October 2025 in order for ANZ to provide ‘new financing’ and 2) Whether and how ANZ will assess such transition plans for credible alignment with the 1.5°C goal of the Paris Agreement.”

In informing the market of this request, ANZ’s market release said the resolutions were proposed by shareholders holding 0.01% of ANZ’s ordinary shares on issue, and that the same group proposed resolutions at ANZ’s 2019, 2020, 2021 and 2022 annual general meetings, “which were not approved by shareholders”.

Market Forces has for years called for banks and major investors such as retirement funds to pull back their funding for fossil fuel companies.

A report the advocacy group issued earlier this year said Australia's largest banks have continued to lend billions of dollars to fossil fuel projects, even while climate commitments hang over them.

Its report said Australia's ANZ, NAB, Westpac and Commonwealth Banks — the parent banks of New Zealand's big four banks - collectively lent $3.6 billion to fossil fuel projects or companies throughout 2023, increasingly avoiding direct investment to do so through the bond market or corporate lending, what they group calls “through the back door”.

Market Forces said ANZ was Australia’s biggest funder of dirty fossil fuels, providing a total of $A19.8b to the coal, oil and gas industries in the eight years since the Paris Agreement was signed. It also said ANZ went on a “climate wrecking company lending spree in early 2024”, loaning hundreds of millions to companies with some of the biggest coal and gas power expansion plans globally – GE Vernova, Siemens Energy, and San Miguel Corporation.

“Factoring this in, ANZ has blown past $20b in fossil fuel lending since Paris, the first Australian bank to do so,” it said.

ANZ questioned the methodology used in the report, but also said it was 'not surprised to be mentioned given we are the largest domestic lender to Australia's energy sector' - and the sector required a lot of capital to transition to net zero.

All big banks in Australia are coming under pressure from climate activism in one way or the other. Westpac, which on Monday announced New Zealand profits topping $1b, will also be pressed by Australian activist shareholders to come clean on its transition away from financing fossil fuel extraction at its annual meeting in December.

Westpac is being faced with a resolution from the Australian Ethical super fund manager, and shareholders will be asked to vote on the fund manager’s demand the bank reveal details on whether all fossil fuel companies the bank finances will be required to have “credible transition plans” in place by the end of September next year in order to get loans from the bank.

Again, it will be the third year the resolution has been put to Westpac shareholders, who last year rejected it for the second time - although fewer shareholders in total rejected it.