The Commonwealth Bank of Australia (CBA) has acknowledged the challenges of battling persistent inflation while defending its position on lending to energy projects, as shareholders raised concerns about its environmental impact. Speaking at the bank’s annual general meeting (AGM) in Adelaide on Wednesday, CBA Chairman Paul O’Malley and CEO Matt Comyn addressed the bank’s future strategies in response to the evolving energy landscape and economic pressures.
O’Malley emphasized the need for Australia to ensure “reliable, affordable, and low-emissions capacity” in its energy sector, highlighting the continued role of coal and other traditional energy sources. He stated, “New energy technologies will emerge and expand, and as they do, we will continue to assess future capability as it arises.”
CBA has been closely monitoring developments from the Australian Energy Market Operator (AEMO) to guide its funding decisions for energy projects. O’Malley pointed out that while renewable energy is critical, there is still a necessity for “firming capacity” to maintain grid stability. He added, “It’s not simple to say that it’s all renewables without firming, and we do not have all the answers, which is why we look to regulators and AEMO.”
The bank has faced criticism from environmental groups, including Market Forces, for its continued lending to fossil fuel companies. Market Forces’ analyst Morgan Pickett urged CBA to require its customers in the oil, gas, and thermal coal sectors to disclose their alignment with global climate goals before providing financing. “If CommBank can rule out oil and gas extraction companies whose plans are not compatible with a safe planet, ANZ, NAB, and Westpac can and must do the same,” said Pickett.
O’Malley defended CBA’s lending policies, stating that the bank must support companies delivering firm energy solutions. However, he confirmed that the bank is committed to reviewing its lending practices over the next three years to ensure they align with global climate goals. He assured shareholders that future emissions commitments made by CBA would adhere to the Paris Agreement, aiming for net-zero emissions by 2050.
As part of this transition, O’Malley acknowledged the social challenges faced by communities dependent on high-carbon industries. He noted that around 30,000 CBA customers are directly involved in industries that will need to transition to more sustainable practices. “Many of these carbon-exposed customers might have to move to new industries or even new regions to respond to the climate transition,” O’Malley remarked, emphasizing the importance of a well-executed social transition.
On the technological front, the bank faced scrutiny over its decision to restrict transactions on cryptocurrency platforms such as Binance. CBA cited the rise in scams and fraud linked to digital transactions as the primary reason for the move. CEO Matt Comyn defended the bank’s actions, stating, “Many people who are scamming Australian residents are using crypto rails to exit the money.” Despite acknowledging the inconvenience caused to some customers, Comyn said the restrictions had significantly reduced scam losses.
The bank also confirmed that no branches would close in regional Australia until at least 2026, despite the increasing shift towards digital banking. Last year, CBA shut 32 branches, reducing its national presence to 696. However, the bank’s move to consolidate its Bankwest brand as an online-only operation in Western Australia raised concerns among shareholders.
CBA also discussed its commitment to responsibly using artificial intelligence (AI) technology, with O’Malley warning that AI must not get a “free pass” on environmental concerns. He stressed that AI needs to be transparent, secure, and compliant with Australia’s environmental and privacy standards.
As CBA navigates the twin challenges of inflation and climate change, its leadership remains focused on balancing economic resilience with environmental responsibility.
