Groundbreaking climate change case brought against Australias biggest bank

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Press release - 8 August, 2017

Sydney, 8 August 2017: A groundbreaking case filed today against the Commonwealth Bank by shareholders argues the bank has failed to disclose the financial and reputational risk posed by climate change.

Filed by Environmental Justice Australia on behalf of Guy and Kim Abrahams, shareholders of over 20 years, the action is against one of Australia’s “Big Four” banks.

Analysis by Australian environmental finance group Market Forces shows that Commonwealth Bank has loaned AU$6 billion to fossil fuel companies since publicly committing to support the goals of the Paris Agreement 18 months ago. [1]

"The Commonwealth Bank's multi-billion-dollar exposure to fossil fuels not only poses a threat to future generations and the Great Barrier Reef, but, as regulators and analysts have repeatedly warned, it also poses a risk to the Bank's own shareholders,” said Greenpeace Australia Pacific campaigner, Jonathan Moylan.

The case is the latest in a string of legal actions related to climate change taking place across the world. These include actions initiated by frontline communities in the Philippines, senior women in Switzerland, Indigenous Peoples in Canada, farmers from Peru and Pakistan, youth in Norway, Pakistan, Uganda, and the United States, and individuals and NGOs in Belgium, the Netherlands, and Sweden.[2] Three communities in California also recently filed lawsuits against fossil fuel companies demanding compensation for the current and future costs for adapting to climate-induced sea-level rise.[3]

Banks around the world are now on 'notice' that climate change creates significant and material financial risks for many shareholders, now and into the future. If banks and their directors and officers don't fully and accurately disclose the risks to shareholders, then they may face significant legal and liability risk. Today's filing is a case in point,” said Kristin Casper, Litigation Counsel for Greenpeace’s Climate Justice and Liability Project.

The climate lawsuit filed against Commonwealth Bank may be a first but it won't be the last.”

Financial institutions have been repeatedly been warned of potential for various liabilities to arise from climate risk, most notably by the G20 Task Force on Climate-Related Financial Disclosures, led by Governor of the Bank of England, Mark Carney. In February, Australian Prudential Regulatory Authority director Geoff Summerhayes also warned the prudential regulator would be paying increased attention to climate risk.

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