All four of Australia’s major retail banks have now reported their 2017 full year results and it is clear they are still heavily invested in fossil fuels. Collectively, ANZ, Commonwealth Bank, NAB and Westpac are exposed to coal mining and oil & gas extraction to the tune of $28.9 billion.
On the positive side, all four banks are showing declines in coal mining exposure. Even ANZ, which has a $1.1 billion exposure (almost twice as much as its nearest competitor) to coal mining has reduced its overall exposures every year for the last four.
ANZ has claimed in the Australian Financial Review that in future, companies wanting to retain its support will need to back government policies to limit global warming, stress test their portfolios against climate change, use a carbon price to assess investments and have clear business strategies to manage the transition to a low-carbon economy. That said, this didn’t seem to prevent ANZ joining NAB and Westpac in August 2017 to refinance Whitehaven coal, a company that prepares its business for a scenario that will deliver closer to 4ºC of warming.
Offsetting the declines in exposure to coal mining are some staggering increases in support for oil and gas extraction. Commonwealth Bank, for instance, has grown its exposure to oil and gas extraction by 76% over five years, made possible by loans to projects including the Sabine Pass LNG terminal in Louisiana and one of the largest new offshore oil basins in Norway (which ANZ also loaned to). These projects expand the scale of the fossil fuel sector, increasing the total greenhouse gas emissions that will be released into the atmosphere by 2.6 billion tonnes, approximately 5 years worth of Australia’s annual emissions.
NAB’s oil and gas extraction exposures grew by 71% in the last year, suggesting the bank’s positive work on reducing coal exposure would be undone as it goes long on other fossil fuels.