Commonwealth Bank of Australia (ASX: CBA) shares are edging lower in morning trade, down 0.2%.
This comes as the S&P/ASX 200 Index (ASX: XJO) shakes off its losing streak, currently up 0.6%.
That’s this morning’s price action.
Now let’s have a look at the latest on the bank’s climate stance.
How is CommBank addressing climate issues?
Corporations across the world are coming under pressure to meet global emissions targets. As are the banks that finance them.
Speaking to CBA shareholders at the bank’s annual general meeting (AGM), chairman, Catherine Livingstone said:
We recognise that commercial, environmental and social outcomes are interconnected, and that balancing the interests of stakeholders involves achieving positive outcomes in all dimensions. During the past year, we have strengthened our approach to sustainability, including updating our Environmental and Social Framework, which sets out, for our people, as well as our stakeholders, the standards we have set.
CommBank’s CEO, Matt Comyn also addressed the bank’s ESG commitments. He added, “We’re also working on initiatives, such as the first sustainability linked bond and loan because we believe that a sustainable future is a critical part of planning for the future economy.”
Activists demand end to fossil fuel lending
CommBank’s current sustainability commitments weren’t enough to please some CBA shareholders, with environmental activists Market Forces wanting the bank to cease funding fossil fuel projects.
However, as the Australian Financial Review reported, Livingstone said CBA needed to continue funding oil and gas companies that were “committed to the transition to a cleaner economy“.
She did say the bank would take new data from the International Energy Agency’s (IEA) Net Zero by 2050 report into account, which could potentially see it limit loans to high emitters.
Livingstone added, “Our philosophy overall is to support the transition, but to make it very science-based and data-based.” She said CBA would only fund fossil fuel projects to companies that “pass an ESG assessment and absolutely demonstrate they are consistent with the transition to Paris”.
As clients go through their transition, they will need support in terms of capital and lending, and we want to be part of ensuring they can get that funding to make that transition.
Our philosophy is really to work with our clients and support them through the transition. There is a great deal of transition that has to occur over the next ten years. So, quite apart from 2050, targets to 2030 are really crucial if we are to get to net zero emission in 2050.
How have CBA shares been performing?
Though slipping this morning, CBA shares have broadly outperformed the benchmark in 2021. Year-to-date, the CBA share price is up 23%, compared to a gain of 9% on the ASX 200.
Over the past month CommBank has shaken off the wider market retrace, with shares up just over 1%.