ANZ’s recent decision to decline refinancing the Port of Newcastle’s debt points to a sinister trend in corporates pushing their own agenda on clients as a marketing ploy. While we don’t take issue with companies making sensible business decisions for the betterment of shareholders, we do think that forcing ideologies on others have no place, least by companies that have questionable histories surrounding ethics and morals.
We are not fans of the new age of woke corporates pushing their moral values onto customers. What we find galling is the self-belief that they have been bestowed some sort of authority to impose their own ideological beliefs onto others.
Let’s not kid ourselves. Banks handing out lectures on ethical behavior holds about as much water as a leaky pipette. Who on earth appointed them as arbiters of climate change? Does the financial industry employ climate scientists among their ranks or just follow the edicts of the conflicted UNIPCC?
As an example, the Port of Newcastle was told by ANZ Bank that it wouldn’t refinance the $900 million debt facility that had been in place. We doubt for one second that the decision was based on economic risk bases. No, the woke virtue signalers inside the PR department thought turning down good business made sense to atone for its sins elsewhere.
Ahh, but ANZ, like other banks told us that their shareholders have demanded the company steer away from lending to fossil fuel related industries. To a degree that is true. What they don’t tell you is that in a pension fund world that has been destroyed by shrinking margins, there is a need to innovate and create products which attract higher fees. None better than socially responsible investment products to offer inferior returns for the investor with better profitability for the investment house. So it is sold under the pretense of saving the planet but in reality lines the pockets of the fund managers. Who knew?
The bigger joke is that regulators, such as ASIC & APRA, have been pushing for forced climate change reporting. How ironic that ASIC’S own studies have shown a substantial decline in the number of companies who see a need to report climate change impacts, presumably because there is no real impact. Surely individual companies have a far better understanding about their business outlook than the regulator which is trying to act as though it is doing something it knows little about to appear as though it is providing a valuable service. We don’t recall parliament bestowing such a request on the financial regulator to tackle climate change.
Instead of ANZ focusing on the debt bubble in housing and having 2/3rds of the loan portfolio geared to mortgages, it chooses to focus on a topic it has little or no qualifications to speak with any authority. That goes for APRA and ASIC too. These regulators should stick to their lane. There is no place for banks or any other industry to start bullying companies who run legitimate businesses to fundamentally change to fit their climate ideology. In a sense it is a boycott of a legal entity for no other reason than disagreement in beliefs.
This has almost nothing to do with the climate and pretty much everything to do with lining the pockets of activist shareholders through higher fee structures that prey on gullible investors willing to virtue signal to their friends that they’re doing their bit.
To us, there is a huge opportunity to fill the void and lend to these businesses which have futures but risk being marginalized by corporate bullies who are preaching a dogma they personally know little about. We find it somewhat sad that many corporates, instead of making a point to differentiate product lines, seek to dive into commoditized area which are guaranteed to squeeze returns. So much for exploiting competitive advantages.