ANZ

ANZ AGM 17 December 2015

At the ANZ AGM on 17 December 2015, 10.52% of the shares voted for the corporate governance resolution and about 5.4% for the climate change resolution.  For more detail, see our media release.

ANZ 2015 - See it in pictures

We, with the support of Market Forces, Ethinvest and Tas Ethical lodged resolutions to be voted on at the ANZ AGM on 17 December in Adelaide.

The resolutions had 3 parts asking ANZ  to:

  • ask ANZ to provide more information about how much it is exposed to carbon intensive industries
  • set public targets for reducing their exposure to carbon intensive industries.
  • make it easier for shareholders to move resolutions

For more information see our investor briefings on corporate governance and climate change.

Our bank resolutions made a difference last year, and targeting ANZ (which is still the worst performing bank) this year will make a difference.

ANZ 2014

Before its AGM on 18 December ANZ  said it was impossible to give any more information about the carbon it finances.  At the AGM the  Chair told shareholders that the carbon intensity of its power generation investments was 20% below the Australian average for its Australian assets and 17% below the grid average for overseas investments.   Given that it was investing in new power generation it is to be expected that is carbon intensity would be less than the average as that includes some very old power plants.

This last minute disclosure was clearly the result of the pressure placed on the company by the resolution lodged by ACCR.  ACCR is aware of a number of institutional investors who had told ANZ they would vote for our resolution if ANZ did not improve its disclosure.

The disclosure is consistent with our research report.  ANZ appears to be the most exposed and least prepared of the big 4 banks.  Westpac has also disclosed the emissions intensity of its power generation investments and they are approximately half the Australian grid average and so a lot better than ANZ.

Stephen Mayne, Crikey founder and shareholder activist, spoke on the resolution at the AGM on behalf of ACCR.  Here is The Age report on the meeting.  Stephen wrote about the meeting in Crikey and here it is below.

Some 44 years after a group of concerned American doctors won a landmark court case against Dow Chemical that opened the door to what has been literally thousands of non-binding shareholder resolutions, Australia is potentially moving down a similar path.

The public debate on this effectively kicked off at the ANZ AGM yesterday when newly installed chairman David Gonski faced his first shareholder resolution in a long and storied public company career.

However, unlike US-style shareholder proposals, this particular carbon disclosure resolution was to make a binding change to ANZ’s constitution and required approval from 75% of voting shareholders.

ANZ did all it could to make it difficult for the Australasian Centre for Corporate Responsibility, which was lead petitioner. For instance, ACCR’s name was redacted from the resolution so shareholders didn’t even know who was behind it. When debate moved to item five yesterday, it wasn’t invited to speak to or even move the resolution.

Similarly, ANZ rejected ACCR’s request to put a non-binding US-style ordinary resolution. This followed a similar tactic by the Commonwealth Bank, which is now being challenged by the ACCR in the Federal Court in what could be a landmark case that would make it easier for shareholders to put up resolutions in Australia.

The formation of the Australasian Centre for Corporate Responsibility represents the first serious grassroots attempt to improve shareholder democracy in Australia.

The Canberra-based group is supported by a range of players from the Australian ethical investment community, along with some concerned church groups. It is based on the US Interfaith Centre on Corporate Responsibility, which has been influential over many years.

With the dust settling on the Australian AGM season, the ACCR has demonstrated the impact that shareholder resolutions can have. Faced with having to distribute carbon-related resolutions to millions of shareholders, all of the big four banks have improved their carbon disclosure.

Gonski was clearly pleased that ANZ managed to contain support for the ACCR resolution to just 2.95% of the voted stock yesterday. However, just like changing the Australian constitution, investors and proxy advisers are always reluctant to change corporate constitutions. The likes of Toll, Orica and Suncorp have discovered this over the past three years when their own board-endorsed constitutional amendments were defeated.

In order to minimise investor support for ACCR’s relatively innocuous resolution, ANZ had to commit to increased disclosure that chairman Gonski described as follows during his formal address yesterday:

"We are also announcing today that ANZ will report on carbon emissions from project finance lending to the power generation sector. This report is available on our website from today. It shows that the average emissions intensity of power generation financed by ANZ is 20% lower than the Australian average.

"It also shows that outside Australia, the average emissions intensity of generation finance by ANZ is 17% below the grid average in those countries."

"This new disclosure shows we are supporting the transition to a lower carbon economy. It also means you will be able to track our progress in reducing the emissions intensity of our power generation portfolio.

This all sounds great, but for world leaders you really need to look at Dutch giant Rabobank, which, amid a range of sustainability initiatives, released an analysis of the carbon footprint of its loan book way back in 2008.

The limited ANZ data (it only looks at project finance, not corporate lending) is also blurred by its commendable market-leading position in the Australian renewables sector. This is how it can simultaneously have the biggest Australian banking exposures to fossil fuel intensive industries while claiming to have a loan book with below average carbon intensity.

As was evident during the three-and-a-half-hour AGM yesterday, ANZ’s name keeps cropping up when it comes to financing new and existing coal projects in Australia.

ANZ is the largest local financier of Victoria’s Hazelwood generator, the dirtiest brown-coal fired power station in Australia. It was also the financier targeted by Jonathan Moylan’s fake press release in the campaign to stop Whitehaven Coal’s Maules Creek coal mine.

The huge coal reserves of the Galilee Basin in Queensland and the associated Abbot Point coal terminal near the Great Barrier Reef have also attracted ANZ as a potential cornerstone financier of Indian conglomerate GVK.

All of this must sit uncomfortably with a bank based in a Docklands headquarters celebrated for its sustainable design within the City of Melbourne, which keeps winning global awards for its suite of sustainability policies.

And the issue is fast becoming mainstream. Heaven forbid, ANZ’s carbon situation was even the lead business story in The Australian today.

*Stephen Mayne is a City of Melbourne councillor who represented the ACCR on a voluntary basis at yesterday’s ANZ AGM.

The resolution was: 

Special Resolution to amend the constitution: At the end of Clause 13 ‘MEETINGS OF MEMBERS’ insert the following new sub-clause 13.13 “That, each year at about the time of the release of the Annual Report, at reasonable cost and omitting any proprietary information, the Directors report to shareholders their assessment of the quantum of greenhouse gas emissions we are responsible for financing calculated, for example, in accordance with Greenhouse Gas (GHG) Protocol guidance.”

It received 3.1% of the vote.

ACCR investor briefing

ASX announcement

ANZ 2013

Here is an account of ANZ's 2013 AGM by Emeritus Professor Ian Lowe, past President of the Australian Conservation Foundation .


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