ANZ flags more details on loans to carbon polluters

Some shareholders want to change the bank's constitution to force it to publish details on the amount of greenhouse gas emissions it is financing via loans and investments. Photo: Darrian Traynor
Some shareholders want to change the bank's constitution to force it to publish details on the amount of greenhouse gas emissions it is financing via loans and investments. Photo: Darrian Traynor
Some shareholders want to change the bank's constitution to force it to publish details on the amount of greenhouse gas emissions it is financing via loans and investments. Photo: Darrian Traynor

Some shareholders want to change the bank's constitution to force it to publish details on the amount of greenhouse gas emissions it is financing via loans and investments. Photo: Darrian Traynor

Some shareholders want to change the bank's constitution to force it to publish details on the amount of greenhouse gas emissions it is financing via loans and investments. Photo: Darrian Traynor

Some shareholders want to change the bank's constitution to force it to publish details on the amount of greenhouse gas emissions it is financing via loans and investments. Photo: Darrian Traynor

Some shareholders want to change the bank's constitution to force it to publish details on the amount of greenhouse gas emissions it is financing via loans and investments. Photo: Darrian Traynor

Some shareholders want to change the bank's constitution to force it to publish details on the amount of greenhouse gas emissions it is financing via loans and investments. Photo: Darrian Traynor

ANZ Bank will give investors more information about its carbon exposure, as banks face mounting pressure over their role in responding to climate change.

The bank, which has been a key target of environmentalists because of its large exposure to the resources sector, on Thursday argued it funded power stations that emitted less carbon than the national average for the sector.

The move comes after NAB and Commonwealth Bank have also agreed to disclose more details on their carbon financing, in the face of growing pressure from shareholders over the issue.

ANZ also said it was managing its capital in anticipation of new capital rules to make the bank "unquestionably strong," a key recommendation of the financial system inquiry.

At its annual general meeting in Melbourne, chairman David Gonski said the new disclosures showed the average carbon intensity of power generation financed by ANZ was 20 per cent below the Australian average.

The bank on Thursday faced a shareholder resolution to change its constitution, which would force it to publish greater detail on the amount of greenhouse gas emissions the company is financing via loans and investments. It was defeated by a large margin, with preliminary results showing 3 per cent support for the change.

Chief executive Mike Smith acknowledged that environmentalists had criticised ANZ and other banks for their lending to the coal industry and other sources of greenhouse gas emissions, and that it was also a shareholder concern.

"We know that our customers are concerned about climate change. We know that a growing number of Australians see it as a serious and pressing problem. We know that many shareholders are also concerned about it," Mr Smith said.

However, he argued the bank was committed to playing its part in helping to cut emissions, and was also the country's biggest lender to renewable energy such as solar, wind, hydroelectricity and geothermal energy projects.

The Australasian Centre for Corporate Responsibility, which has proposed the change to the bank's constitution, argues ANZ is the most exposed big bank to climate-change risks because of its role as a major lender to the resources sector.

Continuing the cautious bank commentary on the Murray inquiry, Mr Gonski backed the financial system inquiry's "principles-based" approach, and the fact it had passed on key recommendations to the Australian Prudential Regulation Authority.

The inquiry this month recommended banks lift their capital levels so they were "unquestionably strong," and Mr Gonski said the board was keeping this in mind. 

"I assure shareholders that your bank has been actively managing its capital position in anticipation of this and will continue to do so," Mr Gonski said. 

The inquiry said bank capital levels should be in the top quartile of banks internationally, sparking estimates the big four may need to set aside an extra $20 billion.

Mr Murray has stressed it is very difficult to quantify the impost and major banks have declined to comment in any detail on the proposal.

ANZ had been one of the most vocal critics of higher capital charges before the inquiry was finished, but Treasurer Joe Hockey warned lenders against running a public campaign against any moves to make them more resilient.

It is Mr Gonski's first annual general meeting as chair of the bank after moving from the Future Fund this year.

Shareholders voted in favour of a 3.7 per cent rise in Mr Smith's pay, to $10.7 million, and the issue of up to $7.3 million in performance rights for Mr Smith, depending on him hitting targets.

 

This story ANZ flags more details on loans to carbon polluters first appeared on The Sydney Morning Herald.