Australia’s big four banks did not directly finance any new or expanded coal or gas projects last year but are still accused of failing to meet their own climate targets.
Commonwealth Bank, ANZ, NAB and Westpac loaned $3.6 billion to fossil fuel projects in 2023, taking their overall tally to $61 billion since the Paris climate agreement was reached in 2016.
The Banking Climate Failure report from shareholder organisation, Market Forces, accused the banks of breaking their own environmental promises.
At least one of the big four – ANZ – disputed the report’s methodology and said transitioning the energy sector to net-zero carbon emissions by 2050 would require significant capital.
They have all committed to investing in a way consistent with net-zero emissions and keeping global average temperatures within 1.5 degrees Celsius of pre-industrial levels.
It was the first year since the Paris agreement that the banks had not directly funded a new or expanded fossil fuel project.
But Market Forces analyst Kyle Robertson questioned whether they were doing enough to live up to their commitments
“Customers are very concerned big banks are pouring billions of dollars into companies expanding coal, oil and gas when we must accelerate efforts to limit climate change and deadly disasters,” he said.
“The big four banks are engaged in a monumental facade as long as they continue undermining a safe climate by funnelling billions to companies steaming ahead with more coal, oil and gas.”
Market Forces’ report said the overall reduction in fossil fuel lending was masked by the banks backing companies looking to expand their mining output.
They lent $305 million to coal companies in 2023, well down from 2018’s peak of $3.5 billion.
But 70 per cent of the overall $3.6 billion in loans to fossil fuel projects went to companies with expansion plans.
“Despite the scientific consensus that new and expanded fossil fuels are incompatible with these goals, the banks continue to recklessly finance companies pursuing these projects, completely undermining their climate credentials in the process,” the report states.
NAB topped the big four for fossil fuel lending in 2023 at $1.4 billion, with ANZ in second at $1 billion.
Westpac loaned $784 million and Commonwealth loaned $271 million, although that was an increase from 2022.
Both Westpac and ANZ loaned money to the APA Group whose plans to frack the Beetaloo Basin have been likened to a “climate bomb” that might adversely affect the wellbeing of communities in the NT.
“When will the banks live up to their climate commitments, follow the science and stop funding climate collapse?” Mr Robertson said.
An ANZ spokesman said their bank was the largest energy sector lender and that their financed emissions had massively reduced, including a 96 per cent dip in 2023.
“In line with our target, we will have largely exited all thermal coal miners by 2030, with remaining direct exposure largely due to mining rehabilitation bonds which will continue to be provided to existing customers to ensure their responsibilities with exiting mine sites are fulfilled,” they said.
Westpac said 84 per cent of its energy lending went to renewables, adding it was the largest financier of greenfield renewable projects.
“Westpac has set emissions targets in a range of sectors, including thermal coal mining and upstream oil and gas, and we’re working with customers on their transition to a net-zero future,” a spokesman said.
CBA was contacted for comment, while NAB declined to comment.
Alex Mitchell
(Australian Associated Press)