Australia's Commonwealth Bank Taken to Court Over Oil and Gas Financing Policies
SYDNEY (Reuters) — A Commonwealth Bank investor has sued the lender, demanding to see internal documents on its decisions to finance fossil fuel projects to ensure it has complied with its own environmental framework.
Lawyers for retail investor Guy Abrahams, who publicly shamed the country's largest lender in 2017 over its lack of climate-change risk disclosures, say the bank is not hewing closely to pledges of environmental friendliness.
Lawyers for Abrahams filed the action in Australia's Federal court on Aug. 27, seeking authorization to inspect the bank's records on seven oil and gas projects, documents seen by Reuters show.
Abrahams' case seeks documentation on projects including Santos' acquisition of the Barossa Gas Field, the Permian Highway natural gas pipeline in the United States, and Euronav NV "very large crude carriers,” the documents say.
"The Commonwealth Bank of Australia, from August 2019, had a commitment not to fund any new fossil fuel projects unless they were in line with the Paris Agreement, but there is evidence of the bank since participating in seven new oil and gas projects," said David Barnden, Abrahams' lawyer. "The bank's reported financing of seven new fossil fuel projects raises concerns for our clients about the management of the bank and whether it had adequate internal systems in place to ensure compliance with its own policies."
The lawsuit is part of a rising number of climate-related cases being brought in Australia, one of the world's worst greenhouse gas emitters per capita.
Commonwealth Bank representatives in a statement acknowledged the court action by Abrahams - who in 2017 settled a case with the bank that alleged it had failed to disclose climate change risks in its 2016 annual report - but declined to comment further.
Last month some investor and environmental groups criticized Commonwealth Bank for dropping its all-encompassing restrictions on lending to any new oil and gas unless they were consistent with the Paris Agreement.
The bank's rules now only apply to project financing, meaning it can still issue corporate loans to companies in the sectors that don't align with the Paris Agreement.
Abraham's lawsuit also seeks internal documentation justifying that change in policy.
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