‘Not ready’: investors chop down deforestation action
A major bank has struck a conciliatory tone with shareholder activists after failing to get the business-focused group to take further action on deforestation.
Two resolutions introduced by the Australian Conservation Foundation failed overwhelmingly at the National Australia Bank’s annual general meeting on Friday, with more than 85 per cent voting against.
The board had recommended that shareholders reject them.
NAB chairman Philip Chronican told conservationists who spoke in favor of the resolutions that the bank understood the need for sustainable land use and protection of natural capital, while he risked entering into a “heated deal”.
The bank was in the early stages of figuring out how it could codify and standardize its reporting on deforestation, “so we’re not ready for those decisions as written,” he said.
But he added that this would not prevent NAB from understanding how land use is evolving.
Mr Chronican said the bank was increasing its use of vegetation and habitat coverage tools, including the purchase of vegetation databases, to inform climate risk assessments.
He also engaged with stakeholders to build an understanding of the complex problem of deforestation.
Jolene George, head of corporate advocacy at the Australian Conservation Foundation, acknowledged NAB was one of the early leaders among the big four banks in recognizing the risks posed by biodiversity decline and ecosystem degradation.
“Nature, our natural capital, forms the basis of all economic activities,” he said.
“Research from the World Economic Forum shows that everything (economic output) is connected to nature in some way.”
Ms George said the resolutions, put forward with ethical investment platform SIX, Ethics and Good Investment Management Australia, require NAB to say how it manages deforestation-related risks and explain its strategy to eliminate deforestation financing.
“Global momentum is rapidly shifting towards markets, consumers and governments rejecting goods linked to deforestation,” he said.
Ms George said the support the resolutions received showed that investors were increasingly aware of the economy’s dependence on nature.
“A bank cannot afford to ignore the views of 14 per cent of its owners,” he said, referring to support for the first of two resolutions taken after the meeting in Sydney ended.
Deforestation was also a key topic of discussion at Westpac’s annual general meeting on Thursday, after CEO Anthony Miller abandoned a 2023 pledge made by his predecessor Peter King to introduce a deforestation-avoiding credit policy by the end of 2025.
Mr Miller said Westpac’s farming clients were already “exceptional” managers of farmland and had made it clear to the bank that the policy had “no value”.
Another resolution submitted to NAB shareholders on climate change was also withdrawn ahead of the meeting after activist supporters said they were satisfied the bank was making progress on the issue.
Kyle Robertson, head of research at environmental advocacy group Market Forces, said NAB had made progress on climate change but was still funding APA Group, which is developing two gas pipelines from the NT’s Beetaloo Basin to Darwin and Australia’s east coast.
He said the company had opened “one of Australia’s largest and most polluting fracking sites”.
NAB shares rose 1.8 percent to $42.12 on Friday afternoon.
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