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Commonwealth Bank
Still backing fossil fuel expansion
$16.1 billion
Loaned to dirty fossil fuels globally since 2016
Commonwealth Bank is Australia’s second biggest funder of dirty fossil fuels since the Paris Agreement, having loaned a total of $16.1 billion to the coal, oil and gas industries from 2016-2023.
But unlike the other big four Australian banks, the trend is heading in the right direction for CommBank. Its fossil fuel lending has been declining since 2019, down to a record low in 2022 of $267 million, and up slightly to $271 million in 2023.
While the trend is in the right direction, CommBank continued to finance climate wrecking fossil fuel developers including Glencore, Santos, Beach Energy, and APA Group between 2021-2023. CommBank needs to close the loopholes in its policy to rule out any finance to projects and companies expanding the scale of the coal, oil and gas sectors.
Last updated: July 2024
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Tell CommBank that its Paris Agreement pledge means no new fossil fuels!
Public pressure is working
After spending years as a climate laggard, pressure from customers, shareholders and the wider community has helped drive improvements at CommBank.
CommBank, the biggest lender to fossil fuels between 2016-2020, comfortably loaned the least of the big four Australian banks in 2022 and 2023.
In August 2023, CommBank announced updated fossil fuel finance restrictions that brought Australia’s biggest bank closer to alignment with its commitments to the goals of the Paris agreement and net zero emissions by 2050.
CommBank has committed to not providing project finance for any new or expanded thermal coal mines, coal-fired power generation facilities, new and expanded oil and gas fields, and pipelines that service those field expansions. On corporate finance, CommBank has committed to not funding any company expanding coal-fired power generation.
CommBank has also said it will not fund any oil and gas producing (>15% of revenue), metallurgical coal mining (>15% of revenue), or coal-fired power generation (>25% of electricity from coal) company from 2025 that does not have an independently verified plan to cut all emissions – in line with the Paris Agreement’s ‘well-below 2°C’ upper warming limit.
However, this is a bank that historically has been one of Australia’s worst when it comes to supporting fossil fuels. If CommBank wants to be trusted on climate, then it needs to categorically rule out any further finance to new and expanded fossil fuel projects and the companies developing them.
CommBank’s current policy settings are still completely inadequate for a bank ‘committed’ to the goals of the Paris Agreement and net-zero emissions by 2050.
CommBank has left itself until 2025 to fund its climate-wrecking clients before it will require them to have a credible plan to reduce emissions. Whilst we’d like to believe that CommBank will do the right thing and deny funding to fossil fuel clients without credible transition plans before then, it’s hard to trust a bank with a history of pouring billions into fossil fuel expansion.
Community members rally outside a CommBank office in Melbourne to demand the bank stops funding new coal, oil and gas.
Fossil fuel funding since Paris
This chart shows Commonwealth Bank’s year-on-year lending to different fossil fuel sectors since January 2016. The charts shown below include lending to expansion projects and lending to companies with fossil fuel expansion plans.
We have included CommBank’s own reported exposures to fossil fuels as a further demonstration of the bank’s trends.
CommBank loaned $16.1 billion to fossil fuels between 2016-2023, $15.5 billion of this funding came between 2016 and 2021, with 2022 being the lowest rate of lending CommBank has recorded thus far at $267 million. 2023 saw CommBank’s lending increasing slightly up to $271 million.
The $16.1 billion loaned since 2016 includes:
- $2.2 billion to coal,
- $6.2 billion to gas (exc. LNG)
- $3 billion to LNG
- $4.7 billion to oil
Funding for expansionary fossil fuel projects
Since 2016 CommBank has loaned $3.1 billion to new fossil fuel projects, including:
- $928 million to new gas projects (exc. LNG)
- $1.2 billion to new LNG projects
- $919 million to new oil projects
In total, these projects would result in 5.8 billion tonnes of CO2-equivalent.
All of these deals occurred in the five years following the Paris Agreement. Encouragingly, CommBank has not directly funded a new or expanded fossil fuel project since 2020. CommBank provided finance for 14 new or expanded fossil fuel projects between 2016 and 2020, including:
- Sabine Pass LNG Terminal (1,635 MtCO2-e)
- Permian Highway Pipeline (1,018 MtCO2-e)
- John Sverdrup offshore oil field (966 MtCO2-e)
- Corpus Christi LNG (775 MtCO2-e)
- Midship Pipeline (698 MtCO2-e)
- Barossa gas project (401 MtCO2-e)
- Lackawanna gas project (70 MtCO2-e)
- Cambo oil field (66 MtCO2-e)
- AES Corp gas power portfolio – 1,300MW (61 MtCO2-e)
- CPV Fairview gas power facility – 1,050MW (50 MtCO2-e)
- Westmoreland gas power plant – 925MW (44 MtCO2-e)
- Tolmount gas field (28 MtCO2-e)
- Tipton West gas processing facility (14MtCO2-e)
- Tanami gas pipeline (5 MtCO2-e)
Funding for companies with expansion plans
Since 2016 CommBank has loaned $5.5 billion to companies with fossil fuel expansion plans through ‘corporate finance’ debt facilities.
See case studies below for more details on the companies CommBank has financed.
Commbank’s clients – case studies
Santos
In August 2022 CommBank re-financed a loan for Santos that was related to the climate-wrecking Barossa gas project.
This loan in particular was mired in controversy due to the 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 right protected by international human rights standards’ According to its 2023 Environmental and Social Framework CommBank says it supports FPIC for “applicable project finance.”
The bank received a formal human rights complaint from Traditional Owners in April 2023 alleging that their right to FPIC had been violated. The complaint demands that CommBank withdraw from its current loan to Santos and commit to not financing the associated Darwin LNG project, which would process Barossa gas.
CommBank has a history of funding Santos’ environmentally destructive business plans. Of the big four banks, CommBank has loaned 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 environmentally destructive companies like Santos.
Glencore
In March 2021, CommBank took part in a giant $16.7 billion loan to Australia’s biggest coal-miner, Glencore.
Glencore is “one of the world’s largest producers and exporters of seaborne traded thermal and coking coal.” It currently operates 17 coal mines across New South Wales and Queensland and is pursuing an extension for the Hunter Valley Continued Operations project, which is the largest coal mining proposal ever put forward in NSW. The proposed continuation of the mine would see mining continue until 2050, with emissions estimates of up to 1.2 billion tonnes of CO2-e, more than 2.5 times Australia’s current annual emissions.
At a 2024 Australian Senate Inquiry into Greenwashing, a representative of Glencore openly admitted that “we do not make any claim to be aligned with the Paris Agreement”. Based on Glencore’s plans to keep mining coal for decades, anyone could see that was the case. But it’s extremely concerning that Glencore currently slips through the cracks of CommBank’s policy.
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 plans 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
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. We refer to these companies as the ‘Climate Wreckers Index’.
CommBank has a history of supporting Cheniere Energy since the Paris Agreement. On 22 May 2018 CommBank loaned $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 arranged $94.5 million for Cheniere across these two deals.
APA Group
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 enable fracking in the Beetaloo Basin. Market Forces’ analysis estimates Beetaloo gas would create end-user emissions of 1.1 billion tonnes of CO₂-e, more than the emissions from Woodside’s Scarborough, Trion and Sangomar projects combined.
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 enable 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 Climate Scorecard
since January 2016
Total lending to fossil fuels
$16,063 million
Lending to companies with expansion plans
$5,456 million
Lending to expansionary projects
$3,060 million
Total emissions enabled from expansionary projects
(tonnes CO2)
5.8 billion
The data in this section covers the timeframe 1 Jan 2016 – 31 Dec 2023
Time for a policy change
CommBank’s current policy settings have plenty of loopholes that continue to enable it to fund the expansion of fossil fuels.
We have outlined below how CommBank can still fund new and expanded fossil fuel projects, either through direct project finance or through general corporate lending and arranging bonds for companies pursuing them. CommBank must restrict all types of finance to companies expanding the coal, oil and gas sectors to be aligned with the goals of the Paris Agreement.
You can also refer to our detailed analysis of CommBank’s latest climate policy changes in August 2023.
Commonwealth Bank Policy Scorecard
New and expanded fossil fuels
Commonwealth Bank Policy Source(s): Commonwealth Bank 2023 Environmental and Social Framework, Commonwealth Bank 2023 Climate Report
Coal mines
The science
- IEA Net Zero Emissions by 2050 scenario (NZE): No new thermal or metallurgical coal mines or extensions
- IPCC (AR6): Emissions from existing fossil fuel infrastructure without additional abatement would exceed the total limit of emissions in 1.5°C pathways with no or limited overshoot
Thermal coal:
Project-level finance policy: Rules out project-level finance to new or expanded thermal coal mines.
Corporate finance policy: No policy to rule out corporate lending to companies that are developing new, expanded or lifetime extensions of thermal coal mines.
Bonds policy: No policy to rule out arranging bonds to companies that are developing new, expanded or lifetime extensions of thermal coal mines.
Clients pursuing new, expanded, or thermal coal mine lifetime extensions: Glencore
Which banks are they lagging behind?
Lots of banks including:
Westpac will no longer provide corporate finance or ‘bond facilitation’ to companies earning more than 15% of their revenue from thermal coal mining, exiting any relationship with existing clients by 2025.
Barclays no longer provides general corporate purposes financing to clients engaged in opening new thermal coal mines or material expansion of existing thermal coal mines.
Standard Chartered will not provide financial services to companies that acquire or invest in thermal coal mines or develop new thermal coal assets.
DWS has declared that it will not make ‘new investments’ in companies that are investing in new or additional thermal coal mining, and will not renew existing investments in those companies.
Metallurgical coal:
Project-level finance policy: No policy to rule out project finance for new, expanded or lifetime extensions of metallurgical coal mines.
Corporate finance policy: Doesn’t rule out corporate lending to companies building new and expanded metallurgical coal mines, or mine lifetime extensions.
Bonds policy: Doesn’t rule out arranging bonds for companies building new and expanded metallurgical coal mines, or mine lifetime extensions.
Clients pursuing new, expanded, or metallurgical coal mine lifetime extensions: Glencore
Which banks are they lagging behind?
Project finance:
HSBC will not provide new finance to any client for the specific purposes of, or new advisory services in connection with, activities that include new metallurgical coal mines.
Westpac will not provide project finance for greenfield (new) metallurgical coal mines.
Société Générale will not provide dedicated financial transactions, products and services when the underlying activities are: Metallurgical coal extraction activities.
Corporate finance and bonds:
La Banque Postale has committed to not provide finance to coal companies that are developing new coal-related projects.
Coal power plants
The science
- IEA NZE: No new coal power projects
- IPCC (AR6) limited overshoot 1.5°C pathways: No new fossil fuel infrastructure (See above)
Project-level finance policy: Rules out project-level finance to new thermal coal-fired power plants.
Corporate finance policy: Policy rules out corporate lending to companies expanding their coal-fired power generation capacity (only applies to companies that generate more than 25% of their electricity from coal).
Bonds policy: Policy rules out corporate lending to companies expanding their coal-fired power generation capacity (only applies to companies that generate more than 25% of their electricity from coal.)
Oil and gas fields
The science
- IEA NZE: No new long lead time conventional oil and gas projects
- IPCC (AR6) limited overshoot 1.5°C pathways: No new fossil fuel infrastructure (See above)
Project-level finance policy: Rules out project finance to new or expanded oil and gas fields.
Corporate finance policy: No policy to rule out corporate lending to companies pursuing new and expanded oil and gas fields.
Bonds policy: No policy to rule out arranging bonds for companies pursuing new and expanded oil and gas fields.
Clients pursuing new and expanded oil and gas fields: Santos, Norwegian Energy Company, Beach Energy.
Which banks are they lagging behind?
Corporate finance:
Danske Bank has decided not to offer long-term financing or refinancing to E&P oil and gas companies that intend to expand supply of oil and gas beyond what was approved for development by 31st of December 2021.
NatWest has committed to stop lending to and underwriting bonds for major oil and gas producers unless they have a Credible Transition Plan aligned with the 2015 Paris Agreement.
Crédit Mutuel has committed to not financing any oil and gas company that does not have a planned year-on-year oil and gas reduction trajectory.
LNG infrastructure
The science
- IEA NZE: “a global [LNG] supply glut forms in the mid-2020s and under construction projects are no longer necessary.” (p. 139)
- IPCC (AR6) limited overshoot 1.5°C pathways: No new fossil fuel infrastructure (See above)
Project-level finance policy: No policy to rule out project finance to LNG projects servicing new or expansionary oil and gas fields
Corporate finance policy: No policy to rule out financing to companies pursuing new and expansionary LNG projects
Bonds policy: No policy to rule out arranging bonds for companies pursuing new and expansionary LNG projects
Clients pursuing new and expanded LNG projects: Santos
Pipelines
- IEA NZE: No new long lead time conventional oil and gas projects
- IPCC (AR6) limited overshoot 1.5°C pathways: No new fossil fuel infrastructure (See above)
Project-level finance policy: Rules out project finance to pipelines servicing new or expanded oil and gas fields.
Corporate finance policy: No policy to rule out corporate lending companies developing pipelines for new and expanded oil and gas fields.
Bonds policy: No policy to rule out arranging bonds for companies developing pipelines for new and expanded oil and gas fields.
Clients pursuing pipelines for new and expanded oil and gas fields: APA Group
Appendix
Reporting differences
Market Forces reports lending differently to the banks
Each of the big four banks report their fossil fuel exposures based on their lending portfolio to the industry. However, the banks use different reporting methodologies, with some reporting in more detail than others in terms of total exposures to the fossil fuel supply chain.
Market Forces reports on the lending that banks participate in each year, including refinancing of existing deals. We consider each refinancing a conscious decision by a lender to continue supporting a company or project, and lending groups can and often do change upon refinancing and we want to capture this.
In addition, through refinancing existing loans for a new fixed term, a bank is making money available to a fossil fuel company that it otherwise would not have if the bank had decided to not refinance.
When banks report on exposure however, refinancing will not show up as ‘additional exposure’ unless the bank decides to commit more money, as that money is already on the bank’s books. Whilst this approach is legitimate, we believe it doesn’t capture the extent of support the banks provide to companies by refinancing, which is essentially to provide more money to fossil fuel companies for longer periods of time.
CommBank's reported fossil fuel exposure
CommBank changed its exposure reporting methodology in 2023, and now reports its exposure to:
Oil and gas: Includes “Oil and gas upstream exploration and production, petroleum refining, automotive fuel retailing, petroleum product wholesaling and marketing, gas supply, pipeline transport, oil and gas shipping (including FPSO), and LNG terminals.”
Coal: Includes “thermal coal mining, metallurgical coal mining, and coal terminals. Commonwealth Bank also reported its ‘Rail transport’ exposure of $1.8bn, but it’s not clear if this includes rail transport for coal.”
CommBank also reports its exposure to non-renewable power generation at $1.9bn, but no further breakdown has been provided.
As CommBank’s methodology reporting change in 2023 makes further retrospective year-on-year reporting non-comparable, we have only included its reported exposure in 2022 and 2023.
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