Last week I wrote about the revelation that one of Australia’s big four banks had insisted on a confidentiality clause as part of a finance deal for a coal power station — so that its name could not be revealed for fear of reputational damage.

It was ANZ.

Two weeks after it won the Dow Jones Sustainability Index award for the being the world’s most sustainable bank, ANZ lent $150 million for the refurbishment of one of the most polluting coal plants in Australia. The forty-year-old Muja A&B coal power stations in Western Australia were mothballed in 2007 and are about to be refurbished by their state owned owner, Verve energy.

The Prince in Saturday’s Financial Review did not hold back in their ridicule of ANZ and their bungled attempt to hide their investment.

“Hiding the identity of the bank putting up the dough disarms any environmental concerns. It’s absolute genius. The only downside would be if the bank were unmasked.  Even an optimist like the Prince has to worry that, though it’s hilarious fun to frustrate environmental concerns, if you get caught doing it the gutter press could entirely misunderstand or even suggest some sort of shame-faced cover-up … the bank that dare not speak its name, the emperor has no coal loans, or some sort of gratuitous headline that contains the word weasel.”

By insisting on a confidentiality clause, ANZ effectively have effectively admitted that they know they shouldn’t be financing new coal plants but are quite happy to do it so long as nobody finds out about it.

As soon as Verve CEO Shirley In’t Veld let slip that the confidentiality deal had been signed, ANZ must have known that it would go public. They had a week to figure out a good line, but the best they could come up to when talking to the Prince on Friday was that “ANZ has not sought to hide its role in this transaction and the confidentiality agreement simply reflects a practice within our project finance business to prevent the misrepresentation or the extent of our involvement with particular clients.”

Surely the best way to avoid misrepresentation is to make the information public in the first place, rather than going through some ham fisted attempt to conceal it. One would have expected ANZ to know how to manage this kind of reputation risk after their experience with the Wilderness Society campaign that forced them to pull out of the controversial Gunns pulp mill in Tasmania. Although the fact that they sacked most of their sustainability staff means that they probably lost quite a bit of corporate memory, let alone interest in sustainability.

The folk over at the Dow Jones Sustainability Index must be starting to wonder if they’ve made a bit of a mistake. Their own reputation as a serious sustainability index is being sullied by ANZ’s inability to manage their own reputation risk.  Ironically, the ability to manage reputation risk is one of the key indicators in the Dow Jones index. Oops.

With protests over excessive bank fees, polluting coal plants and cluster bombs…the ANZ sustainability report, due any day now, is going to make great reading.