Allegations

On 30 January 2020, three individuals (whose properties were badly burned or destroyed by the 2019 Australian bushfires) and Friends of the Earth Australia filed a specific instance against Australia and New Zealand Banking Group Ltd (ANZ) at the Australian NCP.

The complaint alleges ANZ’s lending and investment practices do not adhere to the Guidelines in relation to issues around fossil fuels, as well as greenhouse gas (GHG) emissions and climate change. Specifically, the complainants allege that ANZ  has not adhered to the Guidelines in three respects. First, ANZ’s lack of disclosure on its indirect GHG emissions resulting from its business lending, and inadequate due diligence regarding its climate-related risks in line with the Paris Agreement goals. Second, ANZ’s failure to prevent or mitigate its adverse environmental impacts, including the absence of appropriate environmental management by the company. Third, ANZ’s disregard for consumer interests by not providing sufficient information on its indirect GHG emissions to enable its customers to make informed decisions.

The complainants are seeking various requests of the NCP, including mediation on the issues in the complaint. The complainants also sought several requests of ANZ, including disclosure of its (indirect) GHG emissions resulting from business lending and investment and to commit to GHG emission targets in line with the Paris Agreement.

This is the first OECD Guidelines complaint to be handled by the Australian NCP’s new Independent Examiner following the NCP’s 2019 organizational restructuring. It is the second complaint concerning a bank‘s climate impacts, following a 2017-2019 complaint brought to the Dutch NCP concerning ING’s climate targets and indirect GHG emissions.

Relevant OECD Guidelines

Outcome

On 24 November 2020, the Australian NCP accepted the complaint for further consideration. However, only three of the four areas of concern raised by the complainants were considered within the scope of the Guidelines: disclosure of indirect GHG emissions from ANZ’s business lending, target-setting in relation to preventing or mitigating environmental impacts (including targets consistent with the Paris Agreement), and climate-related scenario-analysis conducted and reported by ANZ. Fossil fuel divestment was considered by the Australian NCP to be outside the OECD Guidelines’ scope.

The parties agreed to engage in good offices through three meetings facilitated by the Independent Examiner. As the parties did not reach agreement they requested the Independent Examiner to analyze the claims and ANZ’s responsibilities under the Guidelines.

On 15 December 2021, the Australian NCP issued its final statement. It concluded that ANZ actions, conduct, and commitment towards making better alignments gradually were consistent with the Guidelines. Importantly, the NCP also noted the unclear expectations in the Guidelines concerning climate change. The NCP recommend that its final statement be brought to the attention of the OECD, its advisory bodies and OECD Watch.

OECD Watch considers the Australian NCP’s decision to be a conservative interpretation of the OECD Guidelines, particularly the responsibility of an entity in the financial sector for their adverse impacts, as well as the scope of due diligence vis-a-vis climate change. However, OECD Watch welcomes the NCP’s statement about the vagueness of the Guidelines on the issue of climate impacts.

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