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| Protestor's closed a number of Commonwealth Bank branches down in Newcastle in July to protest the banks investment in coal. Supplied |
Lawyers representing Environmental Justice Australia filed proceedings in the Federal Court, with the group claiming it was the first case in the world to test how companies should acknowledge the impact of global warming on their operations.
Melbourne art curator Guy Abrahams and medical practitioner Kim Abrahams allege that by inadequately disclosing the risk climate change posed to its business in its 2016 annual report, the bank breached the Corporations Act by failing to give a true and fair value of its financial position and performance.
They also allege the 2016 report did not inform investors of climate change risks.
They are seeking an injunction to prevent the CBA making the same omissions in future annual reporters.
"We bought Commonwealth Bank shares more than 20 years ago as an investment in our children's future," said Mr Abrahams, who also runs a not-for-profit arts group that agitates for action on mitigating climate change.
"We are deeply concerned about the serious risks climate change poses to the environment and society. The bank should tell investors about the risks climate change will have on its business."
Growing concern
EJA has seized on comments by Australian Prudential Regulation Authority board member Geoff Summerhayes, who told an Insurance Council of Australia forum earlier this year that climate risk was becoming an "important and explicit part" of regulators' thinking.
"If entities' internal risk management processes are not starting to include climate risk as something that has to be considered – even if risks are ultimately judged to be minimal or manageable – that seems a pretty reasonable indicator there might be something wrong with the process," he said.
"Similarly, if you're an investor and you're not already asking questions about how the companies you invest in approach these issues – perhaps you should be."
And prominent Sydney barrister Noel Hutley SC prepared a legal opinion late last year warning it was only a matter of time before litigation was launched against a company director who had failed to take steps to address climate risk.
"We believe the matter is of significant public interest. It should set an important precedent that will guide other companies on disclosing climate change risks," Environmental Justice Australia lawyer David Barnden said in February.
The plaintiffs want the case to also put the spotlight on CBA's failure to rule out bankrolling Adani's proposed Carmichael coal mine, which has seen it become a target of left-wing anti-coal activists.
Links
- Climate change risk disclosure case against the Commonwealth Bank before the Federal Court
- Environmental Justice Australia Concise Statement of Claim (pdf)
- Superannuation trustee duties and climate risk
- Facing up to the truth about the Great Barrier Reef
- NAIF directors can learn from Westpac on climate risk
- Great Barrier Reef: 'Godfather of Coral' urges Adani approval rethink following recent bleaching events
- 'Godfather of coral' urges Environment Minister to revoke Adani approval
- United Nations: Urgent climate action required to save Great Barrier Reef
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