First-Ever Lawsuit Over ‘Inadequate’ Climate Risk Disclosure Could Set New Precedent for Businesses
“After failing to properly disclose the risks posed to its business by climate change in its 2016 annual report, Australia’s Commonwealth Bank (CommBank) is being sued by shareholders. The bank’s failure to disclose the information deprives shareholders of a “true and fair view” of the company’s financial position and performance and puts it at odds with sections 297 and 299A of the Corporation Act. Section 299A states that annual reports must provide enough information to allow shareholders to make informed assessments of the company’s financial position, business strategies and future prospects. . . .
“EJA lawyer David Barnden says CommBank’s climate-related risks are extensive, ranging from the threat of sea level rise to the housing market to the reputational risk posed by the bank’s financing of fossil fuel extraction and infrastructure. Explicitly ignoring and neglecting these risks is what has landed the company in hot water.”