Dear friends and supporters of Altiorem,

Is there a more shameful thing than failing to protect the natural capital that underpins all life on earth?

On 14 October, 15.9% of the votes lodged by Commonwealth Bank of Australia (CBA) shareholders supported a resolution that asked the company to disclose a pathway towards deforestation-free finance. I had written about this campaign and my work with the Australian Conservation Foundation (ACF) previously, but as a recap the context is:

The problem:

• Australia’s east coast is ranked a global deforestation hot spot by WWF, the only wealthy country on the list
• Australia has lost more mammal species than any other continent
• Australia’s State of the Environment report shows that soil health in areas of intensive land use is very poor, the lowest possible rating
• Increasing climate impacts are further exacerbated by deforestation, dramatically increasing the risks and impacts from floods and droughts

CBA’s response:

• ACF had engaged with CBA and the other large Australian banks for a number of years before lodging the resolution. Its investigations have exposed links to potential illegal deforestation, and its assessment of CBA’s approach found it to be doing almost nothing on the issue and, along with ANZ, to be a laggard both domestically and globally.
• CBA’s own annual report tried to obscure the true nature of its exposure to significant deforestation, which (based on the bank’s numbers) ACF and I calculate to be around 30% of its agricultural exposure.
• CBA doesn’t know how much of this deforestation is legal or whether it is occurring in areas of high conservation value.
• Despite this CBA believes its processes are working and do not require significant change; it recommended that shareholders reject the resolution.

None of the facts above are disputed; indeed, at the annual general meeting where the resolution was voted on, I asked Paul O’Malley, the Chair of CBA, to confirm the 30% figure and he did not contest it but nor would he confirm it. When asked how he would react if indeed the number was that high, he responded there were different types of deforestation. It wasn’t clear whether this related purely to legal vs illegal deforestation or something else.

It appears that the proxy advisors whose voting recommendations many institutional shareholders follow didn’t support the resolution, and as the result shows the vast majority of CBA’s shareholders followed suit. I’ve heard it was a mixture of the wording of the resolution or a belief, despite the facts above, that CBA was making sufficient progress on the issue.

It is worth noting that these resolutions are discretionary, in that even if 100% of shareholders supported it, the board and management of the company can choose how to respond, and even to ignore the result completely if they believe that course is in the interests of the company.

The question for these advisors and investors is how bad does the ecological crisis need to get and how little does a clearly complicit company have to do in response, for them to support a non-binding resolution? When will semantics and faint progress give way to the weight of the issue? When will investors stop talking about systems and stewardship and actually act on it? When will they rise to their most basic duty to protect the ecological systems that their portfolios rely on to generate returns?

In December, shareholders of ANZ will again be asked to answer these questions. Like CBA, ANZ is a clear laggard and made precious little progress. Unlike CBA, ANZ had similar resolutions put to its AGM last year. In 2025, 22.7% of shareholders supported a resolution asking for disclosure of the company’s exposure to the issue but only 11.3% supported a resolution similar to CBA’s asking for a plan to eliminate deforestation from their lending.

After another year of scant progress by ANZ, let’s hope shareholders and their advisors rise to the occasion. We have long been in ecological overshoot and are now firmly in the age of consequences; it is time for institutional shareholders to act like it.

Until next week,
Pablo

Disclosure: I have been paid as an advisor to ACF on this campaign in my personal capacity. The views expressed in this newsletter are unpaid and entirely my own.