The case was filed by advocacy group Environmental Justice Australia on behalf of two longstanding shareholders Guy and Kim Abrahams. The applicant argues on basis of Corporations Act 2001 that Commonwealth Bank 2016 report did not adequately inform investors about climate change risks.
The two central provisions of this Act revolve around the need for companies to include a financial report within the annual report giving a “true and fair” view of its financial performance and the need to include a director’s report allowing shareholders to make an “informed assessment” of the operations, financial position and other aspects of the company. In this context, the applicant argues that CBA was aware or should have been aware of the possibility of climate change impacts posing a risk to the business and financial position of many of CBA’s customers or entities in which CBA has a financial interest. Therefore, the applicant argues that those risks should have been disclosed to investors.