Australia’s big banks slammed over inadequate climate risk response

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December 10 2021
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Activists say that Australia’s financial institutions are hedging their bets on climate change.

Critics say that Australia’s banking sector is largely talk and light on action when it comes to the climate crisis.

According to a new report published by global advocacy group Greenpeace, Australia’s biggest banks are leaving themselves wide open to climate risk and failing to live up to the spirit of their public statements around the climate crisis.

Greenpeace Australia Pacific senior coal campaigner Glenn Walker said that the group’s analysis highlighted the way that Australia’s big four banks are trying to play both sides when it comes to tackling the climate crisis.

“Australia’s major banks all claim to support the Paris Agreement and global progress to net-zero by 2050, but Greenpeace’s analysis reveals that they’re hedging their bets, with shonky policies ridden with loopholes to enable lending to fossil fuel projects like AGL’s coal-burning arm Accel,” he said.

Greenpeace’s analysis suggested that Australia’s big four banks loaned $8.9 billion to the coal, oil and gas industries in 2021, and that the past four years have seen these banks lend almost three times as much to fossil fuel companies as they do to renewable-focused firms.

Combined, Greenpeace said that carbon emissions enabled by the financing of Australia’s biggest over the four-year period covering 2016-2020 amounted to 33 times that of Australia’s own annual domestic emissions.

The group also revealed the findings of an international review of domestic climate policies within Australia’s banking sector that saw many local financial institutions fall short, with ANZ “leading” on a score of 22 out of 200 points. Commbank, NAB and Westpac followed on 18, 14 and 13.5 points, respectively.

Broadly speaking, the issue that Greenpeace identifies in the report is a misalignment between the bank’s claims to support the Paris Agreement target of net zero by 2050 and their own internal policies.

“While there is common reference to a 2030 date, this refers to financing from the bank, rather than the planned activities of clients beyond 2030,” the report noted.

That being said, the report did find a few bright spots.

“Some of the other banks in the Australian banking sector have good and clear policies relating to coal power generation, most notably ING, Suncorp and Citigroup,” the report said.

Pointing to the impending AGL demerger, Mr Walker said that the group was turning its sights on Australia’s biggest climate polluter.

“If any of the big four banks retain their outdated climate policies and proceed with funding Accel Energy, they will be exposed not only to significant financial risk, but a huge amount of pressure,” he said.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

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