SYDNEY, 9 NOVEMBER 2023:
In a world first, ANZ shareholder Catherine Rossiter is taking her bank to court over concerns that it is failing to properly manage the material risks of climate change and biodiversity loss.
Ms Rossiter, a long-term ANZ shareholder, says her concerns stem from disclosures in ANZ’s 2022 Annual Report that acknowledged climate change and biodiversity loss were “emerging risks”, but didn’t make clear whether those risks were adequately dealt with in the bank’s risk management framework. Australian financial services laws require that financial institutions properly manage material risks, which include emerging material risks.
“I'm worried that ANZ is not playing the part a financial institution should be playing in the 21st century, in managing climate change and biodiversity risk,” Ms Rossiter says.
“I think it's important for shareholders and the community at large to understand if a major bank is taking these risks seriously. That’s why I’ve filed an application in the Federal Court of Australia seeking more information about ANZ’s risk management systems.”
Ms Rossiter’s lawyers say they understand this to be the first case of its type in the world.
“We’re not aware of any other case that deals with biodiversity as a material risk to a bank, or indeed any other company. It is certainly the first time a shareholder has sought access to the Risk Management Framework of a financial institution regarding the twin risks of climate change and biodiversity loss,” Jess Holgersson, Senior Associate at Equity Generation Lawyers says.
“These systems and frameworks are key to the operations of the bank, and responsibility goes all the way to the Board.”
ANZ is considered the worst performing of the “big four” Australian banks on climate and biodiversity matters. Last year ANZ loaned $2.6 billion to fossil fuel projects, up from $2bn in 2021. In contrast, CBA significantly reduced its lending to $267 million in 2022, down from $1.3bn in 2021.
ANZ also reported a combined A$52 billion exposure in 2022 to agriculture, forestry, fishing and mining sectors, which are generally highly dependent on biodiversity.
“ANZ’s peers are significantly reducing their fossil fuel lending,” Ms Rossiter says. “That’s in line with the International Energy Agency’s finding that we must stop investing in new fossil fuel supply if we want to reach net zero emissions by 2050.”
“ANZ appears to be a climate and biodiversity laggard, and I want more information on how the bank is governed.”
The legal action is the latest foray into climate litigation by investors in Australia. In 2020, Equity Generation Lawyers settled a case against Australian superannuation fund REST by member Mark McVeigh that resulted in the fund recognising climate change as a material, direct and current financial risk to the fund.
For more information or to arrange interviews, please contact Dan Veldre on 0408 972 997