Commonwealth Bank

After CommBank’s policy was published in 2021, CommBank went ahead and re-financed a loan for Santos in August 2022 that was related to the cultural heritage destroying, climate-wrecking Barossa gas project.

This loan in particular was mired in controversy due to the appalling fact that it occurred whilst the Barossa gas project was being disputed by Tiwi Islands Traditional Owners. Read all about this loan.

Free, Prior and Informed Consent (FPIC) is a principle protected by international human rights standards that states ‘all peoples have the right to self-determination.’ According to its 2021 Environmental and Social Framework CommBank says it supports FPIC for “applicable project finance.”

Given this commitment and CommBank’s participation in a loan that violates this commitment, the bank received a formal human rights complaint from Traditional Owners in April 2023. The complaint demands that CommBank withdraw from its current loan to Santos and to not finance the associated Darwin LNG project, which would process Barossa gas.

CommBank has a prolific history of funding Santos’ dirty and destructive business plans. Of the big four banks, CommBank has lent the most to Santos since 2016, more than a whopping $1 billion.

It’s still not clear how CommBank could have assessed the environmental, social and economic impacts of Santos’ proposed projects, including Barossa, to be in line with the Paris Agreement or CommBank’s human rights policies. That’s why it’s crucial CommBank changes its policy to rule out financing destructive companies like Santos.

In March 2021, CommBank took part in a giant $16.7 billion loan to Australia’s biggest coal-miner, Glencore.

Glencore currently operates 17 coal mines across New South Wales and Queensland, and has two coal mine extensions coal mines currently under assessment – the Glendell continuation, and the Hunter Valley Operations extension, which would see coal mines operating until 2050 – well past any Paris-aligned scenario.

CommBank will require oil and/or gas producing, metallurgical coal mining, and coal-fired power generation clients to have published climate change transition plans by 2025 in order to receive corporate or trade finance or bond facilitation. A notable gap in the list of fossil fuel clients CommBank will require transition plan from is thermal coal mining companies.

While the bank has committed to exiting thermal coal completely by 2030, its policy doesn’t require companies in this sector to have transition plans in place by 2025 to keep receiving finance. This could allow six more years of continued finance to thermal coal companies misaligned with global climate goals.

As Glencore is pursuing coal mine extensions, there is a clear risk that CommBank’s current policy settings could allow it to finance coal expansion until the end of this decade. What CommBank finances now is critical, because money loaned today can enable the construction of coal mines that operate past 2050, even if CommBank is completely out of the thermal coal sector by 2030.

Only having a policy that restricts ‘project finance’ for new coal mines is also inadequate. A report by Global Energy Monitor released in October 2022 found that almost 80% of the financial pipeline for new coal projects is coming from ‘general corporate finance’, not dedicated project finance.

CommBank must close this obvious loophole and deny finance to companies with plans to develop new or expanded coal mines or extend the life of existing mines. Otherwise, CommBank risks providing finance to projects that condemn us to climate catastrophe.

Cheniere Energy proudly claims it is the largest producer of liquefied natural gas in the United States and the second largest LNG operator in the world. Because of its massive gas expansion plans, Cheniere is amongst the top 190 companies expanding coal, oil and gas in the world, also known as the ‘Climate Wreckers Index’. 

CommBank has a history of supporting Cheniere Energy since the Paris Agreement. On 22 May 2018 CommBank loaned a whopping $234.8 million to one of Cheniere’s new projects, Corpus Christi, a massive new liquefied gas (LNG) facility in Texas. Market Forces estimates the Corpus Christi LNG project, which started operation in November 2018, will result in 775MtCO2-e over its lifetime.  

In February and September 2021, CommBank was again involved in arranging finance for Cheniere when it took part in arranging two massive bonds worth a combined $3.5 billion. CommBank itself initially contributed $94.5 million for these two deals. 

In November 2023, CommBank took part in a $1.25 billion loan to APA Group. While part of this loan will be used to fund APA’s acquisition of Alinta Energy’s existing Pilbara gas assets, it will also be used for ‘general corporate purposes’. The loan will not mature in full until 2033.

In 2023, APA Group signed preliminary agreements with the leading developers of the Beetaloo Basin, Empire Energy and Tamboran Resources, to construct pipelines that would unlock the carbon bomb Beetaloo Basin. Analysis on the Basin estimates that it would create 1.2 billion tonnes of CO₂-e over its lifetime, more than double Australia’s annual emissions in 2021.

APA Group, as a pipeline company, is not required to have a transition plan under CommBank’s current policy framework. This is a massive loophole when the pipeline infrastructure APA is planning to build will be used to unlock a project that CommBank would never be able to fund directly. 

CommBank must require all of its fossil fuel clients to have credible emissions reductions plans, otherwise it risks enabling them to develop projects completely out of line with its own climate commitments.

CommBank reports its fossil fuel exposure to:

Gas (natural resources), thermal coal mining, thermal coal within ddiversified miners, oil, LNG terminals, coal terminals, gas for electricity generation, coal for electricity generation and oil distribution and refining.

These have been condensed into ‘coal’, ‘gas exc. LNG’, ‘LNG’ and ‘oil’ below for comparison.