Commonwealth Bank (ASX:CBA) share price falls amid climate revolt

A climate activist group says the bank’s climate commitments are not good enough

| More on:
Group of people with banners in climate change protest

Image source: Getty Images

The Commonwealth Bank of Australia (ASX: CBA) share price is in the red as climate activist group, Market Forces, pushes the bank on its commitments to preventing climate change.

At the time of writing, shares in Australia’s largest bank are trading for $103.70 – down 2.06%. The S&P/ASX 200 Index (ASX: XJO), meanwhile, is 0.47% higher.

Let’s take a closer look.

CBA share price down amid climate push

In the wake of the devasting climate report by the Intergovernmental Panel on Climate Change (IPCC), which outlined the dire situation humanity is facing in the next 10 years, activists have stepped up the pressure on governments and corporations to do more to mitigate man-made climate change.

Motley Fool Australia has previously reported on how Market Forces is pushing BHP Group Ltd (ASX: BHP) to keep and wind down its high-emitting assets, rather than sell them.

Regarding CommBank, Market Forces and a group of the bank’s shareholders are placing a resolution on the agenda of its AGM. The group is asking CBA “to no longer fund expansion of the fossil fuel industry, and to set targets to reduce fossil fuel exposure consistent with net zero by 2050″.

It is not clear what impact this could have on the CBA share price going forward.

‘CommBank’s new climate policy a kick in the guts

Market Forces claims Commonwealth Bank’s current plan aligns closer to net zero by 2070 rather than 2050. This claim was made soon after the release of the bank’s full-year results for FY21, which sent the CBA share price to a new record high.

“If the IPCC’s report was a kick in the teeth to all those who desperately want a safe climate future, CommBank’s new climate policy is a kick in the guts to follow it up”, said Jack Bertolus, Australian campaigns coordinator for Market Forces.

“What CBA has delivered today is a retreat from its existing policy, and makes a mockery of its own claim to be supportive of net-zero by 2050.

“We’re living in a moment when we need to pull out all the stops to prevent catastrophic climate change, yet the first thing CBA does is aim for failure.”

Finally, Market Forces says Commonwealth Bank has “watered down its commitment” to not funding fossil fuel activities that did not comply with the Paris Agreement. It says the bank is now only committing to not providing project funding.

When the Australian Prudential Regulatory Authority (APRA) released a draft guidance for financial institutions and their obligations around climate change, Motley Fool Australia asked CBA for comment.

At the time, a spokesperson for CommBank said:

We are aware of, and are currently reviewing, APRA’s draft guidance on managing the financial risks of climate change that was released last week. We continue to work closely with APRA and the broader industry as we strive to limit climate change in line with the goals of the Paris Agreement and support the global transition to net zero emissions by 2050.

CBA share price snapshot

Over the past 12 months, the CBA share price has increased by about 43%. Year-to-date CommBank shares are about 24% higher. It has outperformed the ASX 200 by 18 percentage points over 52 weeks and 10 percentage points in 2021.

Commonwealth Bank has a market capitalisation of around $188 billion.

Should you invest $1,000 in CommBank right now?

Before you consider CommBank, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and CommBank wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Financial Shares

a woman leans forward with her hands shielding her eyes as if she is looking intently for something.
Financial Shares

Own AMP (ASX:AMP) shares? The company is rumoured to be on the hunt for assets

Key points The AMP share price is up 1.71% on Thursday, trading at 89.5 cents The gain comes amid reports …

Read more »

the word stock market in a trolley on a roller coaster track symbolising volatility
Financial Shares

Is the GQG (ASX:GQG) share price a buy in this volatility?

Key points Fund manager GQG Partners has seen its share price drop in recent weeks Broker Morgans sees longer-term growth …

Read more »

man and woman thinking with picture of lightbulbs
Financial Shares

2 cheap financial ASX shares to buy right now

Share markets both in Australia and the US are in turmoil at the moment. In fact, the S&P/ASX 200 Index …

Read more »

happy investors around computer, young investors, loans, finance
Financial Shares

Own IAG (ASX:IAG) shares? Here’s what you’re really invested in

If you own Insurance Australia Group Ltd (ASX: IAG) shares, firstly, commiserations are in order. The IAG share price has …

Read more »

A hand moves a building block from green arrow to red, indicating negative interest rates
Financial Shares

AMP (ASX:AMP) latest to join call for RBA interest rate hike in August 2022

Key points AMP has brought forward expectations of an RBA rate hike to August from November 2022. Strong job numbers …

Read more »

Happy couple at Bank of Queensland ATM machine.
Financial Shares

What do rising bond yields mean for the Bank of Queensland (ASX:BOQ) share price in 2022?

Key points ASX financials are doing slightly better than the benchmark index in 2022 The Bank of Queensland share price …

Read more »

Sad investor watching the financial stock market crash on his laptop computer.
Bank Shares

Why is the Macquarie (ASX:MQG) share price falling this week?

Key points The Macquarie Group share price is down almost 5% this week All ASX bank shares have fallen in …

Read more »

Woman puts heads back and fists in the air as she cheers at laptop
Earnings Results

Netwealth (ASX:NWL) share price lifts on record net inflows of $3.6bn

Key points The Netwealth share price is in the green today following its quarterly update Further growth across all of …

Read more »