Investors reject call for Australia's CBA to stop fossil fuel funding

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The logo for the Commonwealth Bank of Australia adorns their head office in central Sydney, Australia, October 12, 2017. REUTERS/David Gray

SYDNEY, Oct 13 (Reuters) – Commonwealth Bank of Australia (CBA.AX) investors on Wednesday overwhelmingly rejected a resolution calling for the lender to stop financing new fossil fuel projects, highlighting the resistance in the resources-reliant country to climate action.

The resolution, backed by just 14% of voting shareholders at the bank’s annual general meeting, comes ahead of the United Nations’ COP26 climate talks in Glasgow later this month, when Australia will be under pressure to reduce its carbon emissions.

The resolution also asked Australia’s largest lender to publish targets to cut its fossil fuel exposures, consistent with net zero greenhouse gas emissions by 2050, but was not supported by CBA’s board.

“The Board remains fully committed to CBA playing its part in limiting climate change, in line with the goals of the Paris Agreement, and supporting the transition to net zero emissions by 2050,” Chairwoman Catherine Livingstone told investors at the virtual meeting.

She added the bank would consider allowing investors to lodge a non-binding vote on its climate change policies next year.

The unsuccessful resolution also comes as Australian regulators step up their scrutiny of climate-related risks and disclosures. read more

“The level of support was not insignificant, but this does suggest that many investors who have their own net-zero commitments have failed to back the resolution,” said Jack Bertolus, of activist group Market Forces, which helped investors organise the resolution.

“Any investor that has claimed to be committed to net zero by 2050 has to realize that that means no extension of the fossil fuel industry and if they don’t, then they’re really not living up to their commitments to net zero.”

Almost nine out of 10 dollars in Australia’s A$3.1 trillion ($2.28 trillion) managed fund industry are managed by those self-declared as responsible investors, according to the Responsible Investment Association Australasia. read more

A report by the International Energy Agency in May said that for the world to reach its target of net zero emissions by 2050, there should be no more new fossil fuel projects after this year. read more

($1 = 1.3617 Australian dollars)

Reporting by Paulina Duran in Sydney Editing by Mark Potter

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