Greenpeace has alleged that Australia's Big Four banks are significantly exposed to climate risk, with weak climate lending policies and loopholes for fossil fuel lending that are at odds with their commitment to the Paris Agreement.
The analysis from Greenpeace Australia Pacific, released ahead of the NAB, Westpac and ANZ annual general meetings next week, suggests that one of these banks is providing A$800 million to fund Accel, the company that will house energy giant AGL’s coal-burning assets after its proposed demerger.
The activist organisation has ranked the climate policies of Australian banks, and says all four majors – along with the Australian operations of global bank HSBC – have policies in place that include vague language, without reference to lending policies for fossil fuels beyond 2030.
“Despite the IEA and UN warning that Australia’s coal-burning stations must close by 2030, AGL and Accel currently plan to continue burning coal up until 2048, well beyond the timeframe for a safe climate," said Glenn Walker, senior coal campaigner for Greenpeace Australia Pacific.
“Greenpeace is turning its sights on the banks and investors that are funding AGL, 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 If any of the big four banks retain their outdated climate policies and proceed with funding Accel Energy, they will be exposed not only to significant financial risk, but a huge amount of pressure.”
Mark Joiner, a former senior NAB and Citigroup executive, acknowledged Greenpeace has a role to play in aggressively bringing issues to light, but said he took "a more balanced view".
"Greenpeace plays a valuable role in shining a light on things. You need someone to articulate but I also think it's wrong to vilify the institutions and tell them they need to be more strident when they are balancing competing demands, and frankly have come a long way in a relatively short period of time," Joiner said.
Joiner said that in his experience as a banker, more was achieved by encouraging clients to evolve their business models than hitting them with a big stick such as threatening to withhold credit.
"I have a lot of sympathy for the banks in walking that middle path of fulfilling their broader obligations to society and the economy but doing it in a way that is trying to nudge people in the right direction," he said.
"They [the Big Four] have done a good job of shifting their franchises in a more sympathetic direction in the last decade or so. When you see the more egregious projects being proposed, it's the foreign banks that are funding them not the domestic banks."
"Nevertheless the mood in the room [in Glasgow] was that we are moving towards the end of coal," Joiner said. The other mood in the room was "it is no good waffling on about 2050 commitments when we are all focused on 2030 commitments," he added.
The major banks were asked to comment in plain language on the Greenpeace report – given the accusation of using vague language in their policy documents – and to articulate their positions on lending to the fossil fuel industry.
By our publishing deadline, only NAB had made a fair attempt.
A NAB spokesperson said the bank was aligning its lending portfolio to net-zero emissions by 2050.
"We have also set a cap on our oil and gas lending at US$2.4 billion. We were the first Australian bank to do so publicly and transparently. This cap will reduce from 2026 through to 2050, aligned to IEA NZE 2050," she said.
"We are helping customers reduce their own carbon emissions, providing capital as they invest in new technologies and financial innovation through sustainability-linked loans and ESG-linked derivatives. We are actively working with 100 of our largest greenhouse-gas emitting customers to develop or improve their low carbon transition plans by 2023."
For their part, ANZ and Westpac pointed to a series of documents on their respective websites which outlined their progress so far. ANZ, for instance, has also indicted that it is working with 100 of its largest emitting business customers to encourage them to strengthen their low carbon transition plans by end 2024, although it is unclear what will happen afterwards.