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‘Dirty lending’, banker bonuses on agenda

Farmers, community groups and retirees are trying to hold banks to account on climate goals, past scandals, and bonuses.

With shareholder activism on the rise globally, corporate boards are having to pay more attention to litigation and reputational risk along with environmental issues and expectations of better governance.

The Lock the Gate alliance said the “dirty lending” worrying its members included National Australia Bank and Westpac each contributing $110 million to Whitehaven Coal’s corporate loan syndicate, and lenders providing $600 million to coal mining firm New Hope.

“Whitehaven wants to expand its Narrabri Underground coal mine beneath the sacred Pilliga Forest. We can’t let this happen,” Gomeroi Traditional Owner Karra Kinchela said on Wednesday.

“NAB and Westpac’s Sydney and Melbourne based bank bosses are just as guilty as Whitehaven bosses are when it comes to wrecking Gomeroi Country.”

Australia’s big four banks are significantly exposed to climate risk, with loopholes for fossil fuel lending that are at odds with their climate goals, according to a report from Greenpeace Australia Pacific.

“Greenpeace is turning its sights on the banks and investors that are funding AGL, Australia’s biggest climate polluter,” spokesman Glenn Walker said.

“If any of the big four banks retain their outdated climate policies and proceed with funding Accel Energy, they will be exposed not only to significant financial risk, but a huge amount of pressure,” he said.

Accel Energy is being spun out of AGL and will own the electricity utility’s gas and coal-powered plants, with $800 million in debt financing needed from a syndicate of banks.

Westpac chairman John McFarlane said at Wednesday’s AGM the easy decision would be to stop financing all fossil fuels projects, but customers needed help to transition to renewable energy.

“This country does need us to finance various sectors, including electricity generation,” he said.

“We know gas will be with us for some time. We’re not going to be able to deal with renewables immediately.”

ANZ chief executive Shayne Elliott accepts they’re not going to be able to please every stakeholder.

“But the right thing to do is to say this transition, this just transition, requires financing, we’re a natural provider of that financing, we need to choose the right people to partner with.”

There are trade-offs to make, he told a summit last week.

“We have to choose people where we see an alignment of interest, an alignment of belief about the future, people we know have the character and capability to actually deliver the transition, and then work with them and accept that there is nuance, there is difficulty.”

But Oakey Coal Action Alliance secretary Paul King condemns the decisions by both ANZ and NAB to lend to New Hope for its New Acland Stage 3 coal mine.

“The Darling Downs community calls on all financial institutions to refuse granting any more loans to New Acland parent company New Hope,” he said.

Members of the Australian Shareholders’ Association (ASA) unsuccessfully voted against Westpac’s bonuses to its top bankers on Wednesday.

ASIC last month commenced six civil penalty proceedings against Westpac in the Federal Court, alleging widespread compliance failures across banking, superannuation and wealth management as well as the bank’s former general insurance business.

“Many retail investors, invest in company shares to self-fund their retirement or build a deposit for their first house, and the share price impact from turning over these stones is hurting them,” ASA chief executive Rachel Waterhouse said.

Voting against the remuneration report was one clear way for shareholders to express their continued dissatisfaction, she said.

ANZ’s AGM is on Thursday and NAB’s shareholders have their say on Friday.

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