Home > Big four banks make strides, but action still dangerously slow in a climate emergency

Big four banks make strides, but action still dangerously slow in a climate emergency

16 November 2023

16 November 2023

All big four Australian banks have now released updated fossil fuel finance restrictions this year that have, to varying degrees, moved the dial on what they can’t finance going forward.

But, like everything with the banks – the devil is in the detail, and each of the big four have varying degrees of devilry in their new policies.

In positive steps from CommBank and Westpac, we’ve seen a host of new restrictions in place for direct lending to new and expanded fossil fuel projects. Disappointingly, but not surprisingly, ANZ and NAB didn’t move the dial at all on their existing positions, and remain open to directly funding new coal, oil and gas projects.

A key piece of news is that, from October 2025 all of the big four will now require transition plans from fossil fuel companies in order to provide more finance to them (to varying degrees).

A transition plan is how a fossil fuel company will demonstrate to its investors that its business plans are actually consistent with a safe climate. With these latest updates, the bank’s have set out requirements for fossil fuel companies to have these in place by 2025 if they want to be eligible for new finance.

What does that mean for climate wreckers? If you’re a company like Santos, Woodside, or Glencore, who are pursuing massive new coal, oil and gas projects that are incompatible with limiting global warming to 1.5°C, you won’t pass the test and won’t be eligible for finance from 2025.

It is essential for any bank to ensure its financing decisions are consistent with its climate commitments.

However, as always with the banks, the devil is in the detail.

Take action

The next two years are crucial!

The big Australian banks must not finance any new fossil fuel developments before their transition plan policies take effect, but all of them have policy gaps that could allow this to happen.

Tell the big four big banks to fix their policy loopholes, address their transition plan shortfalls, and align their behaviour with their Paris climate commitments.

If you aren’t with any of the big four banks, you can still send them a message!

Just select the ‘send a message to all four banks’ option in the form.

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Your message to ANZ

Subject

Your message

Please feel free to personalise the message! Let ANZ know if you are a customer or shareholder.

Dear ANZ,

I am utterly dismayed at the lack of ambition and commitment in your climate policy update. I am also deeply concerned by the massive flaws in ANZ’s climate policy which must be urgently addressed to give the bank any chance of meeting its Paris climate commitments.

Not including scope 3 emissions in your transition plan requirements renders the policy meaningless. Scope 3 emissions typically account for 90% of upstream fossil fuel companies’ emissions. To not consider whether a company is reducing its largest source of emissions in line with global climate goals before providing new finance is farcical, and makes a mockery of transition plan assessments. This policy loophole provides a licence for fossil fuel companies to keep producing more coal, oil and gas with no financial consequences from the bank.

Furthermore, ANZ has failed to rule out facilitating or arranging bonds, leaving the door open to arrange long-life finance that could fund fossil fuel companies without credible emissions reductions plans for decades. ANZ also fails to require transition plans for metallurgical coal miners, a major driver of the climate crisis, and does not specify whether it expects customers to have a 1.5°C target or, the far more disastrous, ‘well below 2°C’ target in their ‘Paris-aligned’ transition plans.

ANZ also used its policy update to push back when it will begin requiring companies to have transition plans in place, allowing fossil fuel companies two more years of borrowing without review of their plans to reduce or increase emissions. As if all this isn’t bad enough, ANZ is the only big four Australian bank to STILL not rule out directly financing new oil and gas fields, and has the poorest record of any Australian bank on lending to the fossil fuels sector.

Since 2016, ANZ has poured the most amount of money into fossil fuels of all Australian banks, a staggering $18.6 billion. In 2022, ANZ was the biggest lender  to the fossil fuel industry – $2.6 billion –  almost the same amount ANZ loaned to fossil fuels back in 2016. This demonstrates that your bank has clearly failed to rein in its fossil fuel lending since the Paris Agreement.

Worst of all, since commiting to Paris, ANZ has loaned $8.1 billion to companies with plans to expand the fossil fuel industry. Just last year ANZ loaned over $1.2 billion to companies with plans to expand fossil fuels, an increase of almost $500 million on 2016 levels.

ANZ’s woeful policy update and rampant fossil fuel financing behaviour demonstrates a clear necessity for the bank to completely overhaul its thinking on climate, review how the bank is failing to mitigate climate risk, and bring its transition plan expectations in line with its ‘big four’ peers.

I, therefore, sincerely request that you:

– Reinstate your previous transition plan requirements to be in place from the beginning of calendar year 2025, like CommBank – if not sooner; 
– Require transition plans from all fossil fuel companies; 
– Require these transition plans be aligned to a 1.5°C pathway; 
– Require scope 3 emissions reduction targets; 
Rule out providing all types of new finance (project finance, corporate finance, and arranging or facilitating bonds) to all fossil fuel companies without 1.5°C-aligned transition plans, and 
– Between now and the date ANZ requires transition plans from, do not provide financial support (corporate finance, project finance or bonds) to any project or company that expands the fossil fuel sector.

On behalf of all your customers and all Australians who care about a safe future for our communities and our families, I sincerely urge you to adopt these requests.

Your consideration and response on this matter is highly appreciated.

Sincerely,

Your message to CommBank

Subject

Your message

Please feel free to personalise the message! Let Commbank know if you are a customer or shareholder.

Dear Commonwealth Bank,

I have closely followed the ‘big four’ Australian banks’ climate policy changes this year and was pleased to see CommBank's progress in August with the updated fossil fuel finance restrictions stated in your Environment and Social Framework. I am encouraged to see Australia’s biggest bank finally taking steps to align with your Paris climate commitments.

However, with the other ‘big four’ banks’ having now released their latest climate policies, it is clear that CommBank is no longer leading the pack in all areas and must go further to meet its Paris climate commitments.

While not perfect, Westpac has surpassed CommBank on multiple fronts.

Westpac now has the most project finance restrictions of the big four Australian banks and will no longer directly fund new or expanded oil and gas fields, or the infrastructure that unlocks it like pipelines and LNG plants. Furthermore, Westpac is refusing to directly finance new metallurgical coal mines.

Westpac has also stated a clear expectation of a 1.5°C target requirement for company transition plans, a benchmark that also surpasses the far more dangerous ‘well-below 2°C’ threshold adopted by CommBank.

Despite the progress CommBank has made to date, there are still significant gaps in your policy which leave the door open for you to finance new or expanded fossil fuel projects.

I, therefore, sincerely request that you:

– Require transition plans from all fossil fuel companies, including thermal coal mining companies, gas power generators and companies building infrastructure to unlock new fossil fuel supply. 
– Require transition plans to be aligned with a 1.5°C warming pathway, (like Westpac), rather than a far more dangerous ‘well-below 2°C’ pathway. 
– Rule out all types of new finance (project finance, corporate finance, and arranging or facilitating bonds) for  all fossil fuel companies that don’t have 1.5°C-aligned transition plans. 
– Between now and the beginning of 2025, do not provide any new finance (project finance, corporate finance, or bonds) to any project or company that expands the fossil fuel sector.

It’s time for CommBank to fully deliver its climate commitments. On behalf of all your customers and all Australians who care about a safe future for our communities and our families, I sincerely urge you to adopt these requests.

Your consideration and response on this matter is highly appreciated.

Sincerely,

Your message to NAB

Subject

Your message

Please feel free to personalise the message! Let NAB know if you are a customer or shareholder.

Dear NAB,

I was pleased to hear that you have provided more clarity of what your translation plan expectations will be and which companies they will apply to. However, I am deeply disappointed to see that NAB has delayed this expectation for another two years, and that NAB did not strengthen project lending restrictions in the interim.

The science is clear: new and expanded fossil fuel projects are not aligned with the world’s climate goals. As such, the delayed implementation of policies that restrict lending to companies expanding the fossil fuel industry is untenable. NAB’s policy update and lending behaviour continues to be at odds with efforts to limit global warming to 1.5°C and does not align with your commitment to the Paris Agreement.

In March 2022, NAB loaned $290 million to Global Infrastructure Partners for the Pluto 2/Scarborough gas project; in August 2022, you took part in a $1.8 billion loan to Santos; and in November 2022 you acted as a joint book runner for a $644 million bond to one of the biggest LNG facilities in the world with massive expansion plans, Sabine Pass. Allowing fossil fuel companies another two years to access finance to develop new projects without requiring a Paris-aligned transition plan is unacceptable.

I was also deeply dismayed that NAB failed to restrict facilitation or arrangement of bonds for fossil fuel companies. If NAB is to be taken seriously on climate, it must rule out bonds for fossil fuel companies whose actions are inconsistent with global climate goals. Your peers, CommBank and Westpac, have both made commitments to not facilitate or arrange bonds for companies in some fossil fuel sub sectors, a step that NAB must also urgently adopt.

NAB’s very recent lending behaviour shows the bank is still willing to hand out cash to some of the world’s biggest climate wreckers, enabled by the gaps in your policy.

I, therefore, sincerely request that you:

– Bring forward your Paris-aligned transition plan requirements to the beginning of calendar year 2025, in line with CommBank – if not sooner;
– Require these transition plans to be aligned with a 1.5°C pathway;  
– Require these transition plans to not just disclose emissions but explicitly require scope 1, 2 and 3 emissions reductions targets;
– Add restrictions on facilitating or arranging bonds for fossil fuel companies who fail to meet these transition plan expectations;
– Rule out providing all types of new finance (project finance; corporate finance, and arranging or facilitating bonds) to all fossil fuel companies without 1.5°C-aligned transition plans; 
– Between now and the date NAB requires transition plans from, do not provide financial support (corporate finance, project finance or bonds) to any project or company that expands the fossil fuel sector.

On behalf of all your customers and all Australians who care about a safe future for our communities and our families, I sincerely urge you to adopt these requests.

Your consideration and response on this matter is highly appreciated.

Sincerely,

Your message to Westpac

Subject

Your message

Please feel free to personalise the message! Let Westpac know if you are a customer or shareholder.

Dear Westpac,

I was pleased to hear of the progress you made in your recent climate policy update. In particular, I was relieved to learn that Westpac will not be directly financing new coal mines, oil and gas fields and the infrastructure that unlocks them, like pipelines and LNG plants. Knowing that Westpac  will no longer be able to directly enable climate wrecking projects provides at least some reassurance that progress is being made.

I was also pleased to learn that, effective immediately, Westpac will no longer be providing any type of finance to pureplay thermal coal companies.

Whilst this progress is welcome, I was deeply disappointed to learn that you have delayed when you will require companies to have transition plans in place. Giving climate-wrecking fossil fuel companies more time to access finance while they are developing new projects goes against efforts to limit global warming to 1.5°C and your commitment to the Paris Agreement.

I am concerned that by enabling an extra nine months of unchecked finance to fossil fuel producers Westpac could push through deals that enable companies to action new fossil fuel projects. This concern is well-founded based on Westpac’s recent lending behaviour; in a nine month period in 2022 Westpac loaned $482 million to Woodside, Santos, and Global Infrastructure Partners for the Pluto 2 LNG project – all incompatible with limiting global warming to 1.5°C.

In just the last two months, Westpac has also acted as co-placement agent for a $1.3 billion Santos bond and participated in a $2.3 billion loan to massive Japanese gas producer, trader and power company, JERA. Santos has five new and expanded oil and gas projects in the pipeline and is on a path to increase its oil and gas production by 60% between 2022 and 2030, while JERA is pursuing several new LNG to power projects in Bangladesh and Vietnam, as well as being Santos’s project partner in the disastrous Barossa gas project.

Westpac’s very recent lending behaviour shows the bank is still willing to hand out cash to some of the world’s biggest climate wreckers, enabled by the gaps in your policy.

I, therefore, sincerely request that you:

– Reinstate your previous Paris-aligned transition plan requirements to be in place from the beginning of calendar year 2025, like CommBank – if not sooner; 
– Require transition plans from all fossil fuel companies, including  metallurgical coal miners and fossil fuel power generators, and companies building infrastructure to unlock new fossil fuel supply; 
– Rule out providing all types of new finance (project finance, corporate finance, and arranging or facilitating bonds) to all fossil fuel companies without 1.5°C-aligned transition plans; 
– Between now and the date Westpac will require transition plans from, do not provide any new finance (project finance, corporate finance, or bonds) to any project or company that expands the fossil fuel sector.

On behalf of all your customers and all Australians who care about a safe future for our communities and our families, I sincerely urge you to adopt these requests.

Your consideration and response on this matter is highly appreciated.

Sincerely,

Yes, I want to hear more from Market Forces about this campaign

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TOOK ACTION: Banks – ALL BANKS Policy Update – Nov 2023

The devil in the detail

To varying degrees, the bank’s have left themselves plenty of loopholes to continue funnelling money to some of the world’s worst climate wreckers. The biggest loophole of all is that the banks have nearly two more years before these requirements come into effect.

Given the bank’s track records on financing new fossil fuel developments, two years is a long time and unacceptably dangerous.

Over the course of 2021 and 2022 the banks funnelled $7.6 billion to fossil fuel expansion. It’s critical the banks know that shareholders, customers and Australian communities will not accept another cent going to new fossil fuel projects and the companies developing them.

Progress on climate is needed urgently, but the banks are moving way too slowly. There are still massive gaps in the policies of the ‘big four’ that could enable them to keep arranging new or renewed finance for fossil fuel expansion over the next two years, and possibly even decades beyond 2025.

The good and the bad, bank by bank

ANZ

Overall, ANZ’s new climate commitments are the weakest of the big four’s this year. This is not surprising given that ANZ holds the title of being Australia’s biggest funder of fossil fuel expansion since the Paris Agreement.

The good

40% reduction to oil and gas by 2025: ANZ announced it will be reducing its exposure to upstream oil and gas companies by 40% by October 2025 (based on 2020 exposure). The increased target is more ambitious than the other big four, although CommBank already reduced its oil and gas exposure by 56% between 2021 and 2022.
New lending to oil and gas to require transition plan from 2025: ANZ announced that from October 2025 new lending to oil and gas companies will require them to have a transition plan, although the transition plan requirements remain weak.

The bad

No scope 3 emissions requirements: ANZ won’t require fossil fuel companies to have Paris-aligned scope 3 emissions reductions targets as part of their transition plans. It’s hard to overstate how big of a flaw that is, considering that scope 3 emissions often account for 90% of upstream fossil fuel companies’ emissions. In other words, ANZ may well be happy to sign off on transition plans as ‘credible’ so long as they address 10% of a client’s emissions. This makes a mockery of transition plan assessments and is more or less licence to keep producing more oil and gas with no financial consequences from the bank.
No exclusions on bonds: ANZ failed to place any restrictions whatsoever on the facilitation or arranging of bonds for fossil fuels. This is again out of step with CommBank and Westpac, who have both made commitments to not facilitate or arrange bonds for companies in some (but not all) fossil fuel sub sectors that fail to meet the world’s climate goals.
Nothing on metallurgical coal miners: ANZ’s transition plan policy still has no requirements or expectations for metallurgical coal miners. Due to its reliance on metallurgical coal, the steel industry accounts for 7% of global emissions. Despite the need to urgently transition away from all coal, the metallurgical coal industry is expanding. According to Global Energy Monitor, there are 237 proposed new metallurgical coal mines and 143 proposed thermal and metallurgical mixed mines globally.
No project finance restrictions: Unsurprisingly, ANZ did not announce any new project finance restrictions, leaving them with the embarrassing title of being the only big four bank to yet to even rule out directly financing new oil and gas fields.
Pushed back their deadline for transition plans: Like its peer, Westpac, ANZ pushed back its deadline for requiring transition plans from fossil fuel companies by a full nine months to October 2025, giving the bank even more time to fund climate wrecking companies and projects.
No clear temperature ambition: ANZ has stated it expects its customers to have ‘Paris-aligned’ transition plans, but doesn’t specify if that means a 1.5°C target or the far more disastrous ‘well below 2°C’ target.

Commbank

To learn more about CommBank’s policy, see our in-depth analysis from August.

The good

Credible transition plans required from 2025: CommBank announced it will require emissions reductions plans from its oil and gas, metallurgical coal mining, and coal-fired power generation clients from 2025 before providing any more corporate finance or facilitating bonds.
No more project finance for oil and gas expansion, including pipelines: CommBank will no longer directly finance new or expanded oil and gas fields, and some critical infrastructure that unlocks those fields like pipelines.

The bad

No categoric restrictions on new LNG and metallurgical coal mines: CommBank didn’t rule out directly financing new LNG plants or metallurgical coal mines, projects we can’t afford if we want to avoid climate disaster.
Temperature ambition not aligned with climate commitments: CommBank will only require its clients’ transition plans to align with the goals of the Paris Agreement’s least ambitious goal to limit global warming to well below 2°C, falling short of the Agreement’s much less dangerous goal of “pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.”

NAB

To learn more about NAB’s policy, see our latest analysis.

The good

Likely exit date from lending to climate-wrecking companies: From 1 October 2025, NAB ‘intends’ to require oil and gas, metallurgical coal, and power generation (25% or more electricity generated from coal) to have a Paris-aligned transition plan in order to receive new or renewed corporate or project lending.

The bad

No project finance restrictions: NAB can still finance new and expanded coal, oil and gas projects for nearly two more years. This includes new gas pipelines, LNG plants, and metallurgical coal mines.
No exclusions on bonds: NAB failed to place any restrictions on facilitating or arranging bonds for fossil fuel companies. This is again out of step with CommBank and Westpac, who have both made commitments to not facilitate or arrange bonds for companies in some (but not all) fossil fuel sub sectors that fail to meet the world’s climate goals.
Too much time for climate wreckers: NAB did not change the deadline for transition plans – 1 October 2025 – which gives climate wreckers a full nine extra months to get funding from NAB. Nine months is a long time in finance; read more here to see what NAB got up to in that timeframe just last year.
No clear temperature ambition: Similar to ANZ, NAB announced no temperature ambition for its ‘Paris-aligned’ transition plans. It’s not clear if that means a 1.5°C target or the far more disastrous ‘well-below 2°C’ target.
Will NAB actually require scope 1, 2 and 3 emissions reduction targets? NAB will consider ‘Relevant Scope 1, 2 and 3 emissions disclosures’ and ‘interim and long-term targets and their alignment to scenarios consistent with the Paris Agreement’. It’s still not clear if NAB will require 1.5°C-aligned Scope 1, 2 and 3 targets.

Westpac

To learn more about Westpac’s policy, see our latest analysis.

The good

Ruled out most new and expanded fossil fuel projects: Westpac now has the most project finance restrictions of the big four Australian banks and won’t directly fund new or expanded oil and gas fields or the infrastructure that unlocks it like pipelines and LNG plants. It also won’t finance new metallurgical coal mines.
Credible transition plans required for oil and gas finance from October 2025: An oil and gas company will need to have a credible, 1.5°C-aligned transition plan that covers scope 1, 2 and 3 emissions in order for Westpac to continue providing finance (including facilitating bonds). Westpac is the only one of the big four to have a 1.5°C requirement for company transition plans.
Early exit from thermal coal: Westpac announced it won’t be lending to or arranging finance for any thermal coal mining companies (>15% of revenue from thermal coal) effective immediately. They will also be completely out of these types of companies by 30 September 2025.

The bad

Pushed back their deadline for transition plans: Westpac pushed back its deadline for requiring transition plans from fossil fuel companies by a full nine months to October 2025, giving the bank even more time to fund climate wrecking companies and projects.
Transition plan requirements not applied to all fossil fuel companies: Westpac only requires oil and gas companies to have transition plans by October 2025 for new finance, leaving metallurgical coal miners and power generators without scrutiny.

Where to from here?

The updates we’ve received from the banks mostly revolve around a point in the future – 2025.

CommBank and Westpac have both announced project finance restrictions that further limit what they can finance from today. But on corporate finance and bonds, it’s more or less business as usual for the next two years.

NAB and ANZ remain clear laggards. ANZ announced a new oil and gas target that will see it reduce exposure faster, but it is nothing short of pathetic that its transition plan expectations won’t even require fossil fuel companies to reduce emissions from the burning of their own fossil fuel products.

NAB has got a likely exit date from lending to climate-wrecking companies, but even their transition plan expectations don’t include a clear temperature requirement. Neither ANZ or NAB have any restrictions on bonds, which are becoming a more critical source of finance for the fossil fuel industry.

Since Market Forces was started ten years ago, we’ve been campaigning to get banks and other financial institutions to use our money to protect the environment, not damage it. In that decade our community backed campaigns have had some major wins, but the door’s still wide open for the banks to keep funnelling billions to new climate wrecking fossil fuel projects for nearly two more years, and even beyond. With the world’s carbon budget rapidly dwindling, this door needs to be shut immediately if the banks are to live up to their climate commitments.

Support our people powered movement today and help us campaign to kick finance out of dirty fossil fuels for good!