Climate commitments crumble as ANZ and Westpac bankroll new fossil projects

New data shows ANZ and Westpac are accelerating fossil fuel loans despite public climate commitments, putting them at odds with both regulators and their own commitments, says Will van de Pol.

As LIBERAL MEMBERS bicker after formally rejecting the scientific and economic imperative to achieve net-zero greenhouse gas emissions, a divide is beginning to open among the country’s biggest banks.

Australia’s big four banks all claim commitment to climate targets Paris Agreement. Just two – ANZ And Batıpac – failing to translate claims into concrete action.

of Australia National Climate Risk Assessment And Climate Change Authority We foresee significant risks across Australia’s economy and society. In business-as-usual scenarios for Australia, agricultural and labor productivity losses would exceed $4.2 trillion by the end of the century, extreme weather events would cost $35 billion a year by 2050, and $500 billion would be wiped from the property market by 2030 due to climate change.

Each degree of further warming further increases these threats.

Market Forces has just finished crunching the latest figures on the big four banks’ financing of the coal, oil and gas sectors. findings These are clear: Westpac and ANZ are backing a new wave of fossil fuel expansion that undermines Paris climate targets. Commonwealth Bank And National Australia Bank We have made significant progress in cutting ties with major polluters.

The flurry of bank reports last week included detailed climate-related financial disclosures. But more explanation does not equal more clarity.

By following the money, we can cut through the noise to see which banks are failing to make real progress on climate commitments. Data doesn’t lie.

Since the start of 2024, ANZ and Westpac have accounted for more than 80% of all loans from Australia’s big four banks to the world’s major fossil fuel companies, undermining the clean energy transition.

These two banks are particularly inviting intense scrutiny and increased regulatory, legal and reputational risk by continuing to finance fossil fuel expansion that is incompatible with the climate goals they claim to support.

ANZ remains the worst offender, providing almost $16 billion in financial support to major fossil fuel companies over the past decade.

By contrast, CommBank accounts for less than 6% of the big four’s total financing of coal, oil and gas companies that pose the worst climate threat since the start of 2022. This is a remarkable turnaround from our largest bank, which only a few years ago was outpaced by ANZ, Australia’s biggest lender to fossil fuels.

There are clear signs of a promising turnaround at NAB, despite a later and less obvious change. NAB’s financing of major fossil fuel companies has fallen by nearly two-thirds since the beginning of 2024 compared to the annual average from 2016 to 2023.

Now let’s get to the bad news.

Westpac is going backwards on climate action, leaving CommBank and NAB behind and paving the way for ANZ in its shameful race to the bottom. Westpac has made up 36% of loans to major coal, oil and gas companies since 2024, despite previously lending the least to fossil fuels among its peers.

Westpac’s fall from grace becomes even more worrying when we consider how it has backtracked on previous commitments. ‘facilitate financing of the gas industry‘.

In July 2022, the then head of corporate banking, Anthony Miller, in question Westpac would do this “We will continue to provide corporate loans only to customers with reliable migration plans through 2025.”. bank at that time defined A credible transition plan that complies with the 1.5°C global warming limit and covers emissions from burning fossil fuel companies’ products.

These “scope 3” emissions are generally around 90% An oil and gas producer’s contribution to global warming is worsening the human and economic impacts of climate-induced heatwaves, wildfires and floods.

Miller, who has now stepped into the CEO role, has led the bank as Westpac’s latest announcement has watered down his previous statements. remarks It shows that it continues to fund fossil fuel companies with virtually no plans to rein in Scope 3 emissions.

Westpac also reduced its target and made clear that the bank could continue to finance companies that are not aligned with its climate targets. Paris Agreement, ‘depending on about our relationship with that customer’.

Westpac’s client list includes: Santos, forest side, blood pressure And BHPTotal fossil fuel-related scope 3 emissions are higher than Australia’s total national emissions Decisions based on relationships rather than compliance with climate commitments are fraught with danger for Westpac as customers and regulators hold banks accountable for greenwashing.

The data tells us that they are waking up to the fact that CommBank and NAB are living up to their commitments to support their goals. Paris Agreement and net-zero emissions by 2050, which requires cutting funding to companies intent on expanding away from fossil fuels.

ANZ and Westpac have the same comprehensive climate commitments. Australia’s misleading and deceptive conduct laws require ANZ and Westpac to have a reasonable basis for making these representations.

The growing divergence in fossil fuel financing poses serious risks to ANZ and Westpac and needs to be addressed urgently.

Westpac and ANZ must change course to meet their climate commitments, not stick their heads in the sand like some politicians and expose customers, shareholders and all Australians to increased climate risk.