Some 44 years after a group of concerned American doctors won a landmark court case against Dow Chemical that opened the door to what has been literally thousands of non-binding shareholder resolutions, Australia is potentially moving down a similar path. The public debate on this effectively kicked off at the ANZ AGM yesterday when newly installed chairman David Gonski faced his first shareholder resolution in a long and storied public company career. However, unlike US-style shareholder proposals, this particular carbon disclosure resolution was to make a binding change to ANZ’s constitution and required approval from 75% of voting shareholders. ANZ did all it could to make it difficult for the Australasian Centre for Corporate Responsibility, which was lead petitioner. For instance, ACCR’s name was redacted from the resolution so shareholders didn’t even know who was behind it. When debate moved to item five yesterday, it wasn’t invited to speak to or even move the resolution. Similarly, ANZ rejected ACCR’s request to put a non-binding US-style ordinary resolution. This followed a similar tactic by the Commonwealth Bank, which is now being challenged by the ACCR in the Federal Court in what could be a landmark case that would make it easier for shareholders to put up resolutions in Australia. The formation of the Australasian Centre for Corporate Responsibility represents the first serious grassroots attempt to improve shareholder democracy in Australia. The Canberra-based group is supported by a range of players from the Australian ethical investment community, along with some concerned church groups. It is based on the US Interfaith Centre on Corporate Responsibility, which has been influential over many years. With the dust settling on the Australian AGM season, the ACCR has demonstrated the impact that shareholder resolutions can have. Faced with having to distribute carbon-related resolutions to millions of shareholders, all of the big four banks have improved their carbon disclosure. Gonski was clearly pleased that ANZ managed to contain support for the ACCR resolution to just 2.95% of the voted stock yesterday. However, just like changing the Australian constitution, investors and proxy advisers are always reluctant to change corporate constitutions. The likes of Toll, Orica and Suncorp have discovered this over the past three years when their own board-endorsed constitutional amendments were defeated. In order to minimise investor support for ACCR’s relatively innocuous resolution, ANZ had to commit to increased disclosure that chairman Gonski described as follows during his formal address yesterday:

"We are also announcing today that ANZ will report on carbon emissions from project finance lending to the power generation sector. This report is available on our website from today. It shows that the average emissions intensity of power generation financed by ANZ is 20% lower than the Australian average. "It also shows that outside Australia, the average emissions intensity of generation finance by ANZ is 17% below the grid average in those countries." "This new disclosure shows we are supporting the transition to a lower carbon economy. It also means you will be able to track our progress in reducing the emissions intensity of our power generation portfolio.

This all sounds great, but for world leaders you really need to look at Dutch giant Rabobank, which, amid a range of sustainability initiatives, released an analysis of the carbon footprint of its loan book way back in 2008. The limited ANZ data (it only looks at project finance, not corporate lending) is also blurred by its commendable market-leading position in the Australian renewables sector. This is how it can simultaneously have the biggest Australian banking exposures to fossil fuel intensive industries while claiming to have a loan book with below average carbon intensity. As was evident during the three-and-a-half-hour AGM yesterday, ANZ’s name keeps cropping up when it comes to financing new and existing coal projects in Australia. ANZ is the largest local financier of Victoria’s Hazelwood generator, the dirtiest brown-coal fired power station in Australia. It was also the financier targeted by Jonathan Moylan’s fake press release in the campaign to stop Whitehaven Coal’s Maules Creek coal mine. The huge coal reserves of the Galilee Basin in Queensland and the associated Abbot Point coal terminal near the Great Barrier Reef have also attracted ANZ as a potential cornerstone financier of Indian conglomerate GVK. All of this must sit uncomfortably with a bank based in a Docklands headquarters celebrated for its sustainable design within the City of Melbourne, which keeps winning global awards for its suite of sustainability policies. And the issue is fast becoming mainstream. Heaven forbid, ANZ’s carbon situation was even the lead business story in The Australian today. *Stephen Mayne is a City of Melbourne councillor who represented the ACCR on a voluntary basis at yesterday’s ANZ AGM.