Westpac

In August 2022, Westpac loaned $65 million to Santos as part of a $1.8 billion loan. This loan was related to the highly controversial Barossa gas field Santos is currently developing. The Barossa Project faces opposition from some Tiwi Islands Traditional Owner communities, as Santos plans to drill for gas in Tiwi Islands Sea Country.

In September 2022, Tiwi Islands Traditional Owners won a Federal Court challenge against NOPSEMA with respect to Santos’ Barossa project. The court ruled that Santos had failed to adequately consult Tiwi Islands Traditional Owners about the project. Santos challenged the ruling, but its but its appeal was rejected by the Federal Court in December.

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. In April 2023, Westpac received a human rights complaint for its involvement in the loan from six Traditional Owners and Elders from the Munupi, Malawu and Jikilaruwu clans on the Tiwi Islands, and one Elder from Larrakia country in Darwin, assisted by Equity Generation Lawyers. The complaint demanded that Westpac withdraw from its current loan to Santos and not finance the associated Darwin LNG project, which would process Barossa gas. Read all about this loan in our blog post.

The complaint was initially dismissed by Westpac, and in September 2023 Westpac had a hand in arranging even more money for Santos, acting as a co-placement agent for a $1.3 billion bond. This prompted Traditional Owners to travel thousands of kilometres to attend the bank’s 2023 AGM, where they confronted the board over the lack of engagement regarding the complaint. You can watch their passionate addresses here. Immediately after the meeting, Westpac CEO Peter King agreed to visit the Tiwi Islands to hear their concerns firsthand.

The urgency of this case was further demonstrated in January 2024 when Santos obtained its environmental approvals for Barossa, sixteen months after the Federal Court’s ruling in September 2022. Santos is targeting first gas from Barossa in the third quarter of 2025.

Stand with Traditional Owners! Demand big banks live up to their human rights responsibilities by denying Santos finance.

Westpac, as part of a syndicate of 12 banks, participated in a $1 billion loan to Australia’s largest undiversified coal miner, Whitehaven Coal. It was exposed to Whitehaven until July 2023.

Off the back of an enormous grassroots campaign, on July 17 2023 Whitehaven Coal announced it had failed to renew its $1 billion corporate loan. This loan was first inked in early 2013, meaning this failure to renew marked the end of ten years of financial backing from major Australian banks. Westpac is no longer exposed to Whitehaven Coal, and Whitehaven Coal no longer has the financial backing of any of Australia’s big four banks.

After finally dropping this climate pariah from its books, Westpac brought forward its planned exit from thermal coal (meaning companies that earn >15% of revenue from thermal coal) by five years to 30 September 2025. Westpac’s previous sole commitment was a complete exit from the sector (defined then as companies that earn >5% of revenue from thermal coal) by 2030, which also still stands.

Westpac dealt another death blow to the thermal coal industry, stating that effective immediately Westpac will not provide any new corporate lending or bond facilitation to thermal coal mining companies (>15% revenue from thermal coal). With Westpac accelerating its transition away from thermal coal, it’s up to ANZ, CommBank and NAB to apply more restrictions to their thermal coal customers, such as Glencore, to ensure they don’t enable the expansion of the coal sector with their customers’ money.

In March 2022, Westpac loaned $290 million to Global Infrastructure Partners as part of a $4.6 billion loan to facilitate an acquisition of a 49 per cent stake in the Pluto 2 LNG project, a loan that was critical to Woodside deciding to go ahead with its disastrous giant new gas project, Scarborough.

In July 2022, Westpav loaned $126 million to Woodside as part of a $1.76 billion general corporate loan.

Woodside is Australia’s largest producer of gas, and is pursuing massive expansion plans completely out of line with global climate agreements. Woodside’s business plans would see it bring on five new oil and gas projects currently in its pipeline. By 2028, the company is aiming to increase production by 24 per cent, and if it gets its way, its proposed projects would see an estimated 2 billion tonnes of harmful CO2 entering the atmosphere.

In May 2021, the International Energy Agency released the first Net Zero by 2050 Scenario and concluded that no new oil and gas fields could be developed in a world hoping to limit global warming to 1.5°C. Since then, Woodside has sanctioned a giant new gas project, the climate-wrecking Scarborough/Pluto 2 LNG project in November 2021, and followed this up in June 2023 by sanctioning the new Trion oil field in the Gulf of Mexico.

In April 2024, Woodside set a world record when 58% of its shareholders voted down its poor excuse for a climate transition plan, clearly showing that the company’s shareholders don’t buy the claim that Woodside’s oil and gas expansion is aligned with the Paris Agreement.

In October 2023, Westpac loaned over $100 million to JERA Global Markets as part of a $2.3 billion loan related to the company’s LNG business. JERA has some of the biggest gas expansion plans in the Asia-Pacific region. Some of its dirtiest new proposed LNG projects include:

• Barossa: JERA owns a 12.5% stake in Santos’ destructive Barossa gas project, as well as a 6.1% stake in its associated gas processing plant, Darwin LNG. The issues with Barossa have been well-documented – in 2023 ANZ and Westpac faced formal human rights complaints from Tiwi and Larrakia Traditional Owners over their involvement in a loan related to the project.
• Scarborough: In February 2024, JERA bought a 15.1% stake in Woodside’s climate-wrecking Scarbrough gas field off the coast of North-Western Australia. The gas produced from Scarborough would, when burned, see nearly 700 million tonnes of CO2 enter the atmosphere, almost 1.5 times Australia’s annual emissions.
• Freeport LNG Expansion: JERA owns a 25.7% stake in the Freeport LNG project in Texas, USA. Freeport LNG is expanding its capacity, which would make the facility at least the fourth biggest LNG project in the world.

JERA is a major player in the Japan-led fossil gas expansion in Asia, pursuing five LNG import terminals and LNG to power projects with nameplate capacity of 11.6GW in Bangladesh and Vietnam, effectively trying to lock these countries into dirty and expensive fossil fuels instead of renewable energy. Perhaps most egregious of these examples is the pursuit of carbon bomb LNG projects in the Chattogram region of Bangladesh.

In November 2023, Westpac loaned $80 million to APA Group, as part of a $1.25 billion loan. 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. Market Forces analysis estimates Beetaloo gas would create end-user emissions of 1.1 billion tonnes of CO₂-e, more than double Australia’s annual emissions in 2021.

Despite the fact that Westpac has ruled out project finance for gas pipelines that unlock new or expanded gas fields, it has no policy restricting corporate finance to the companies building them. Unlike Westpac’s upstream oil and gas clients, pipeline companies like APA will not even be expected to produce emissions reductions (climate transition) plans in order to continue receiving funding. This is a massive loophole considering the infrastructure APA intends to build will unlock those fields and bring the gas to markets where it will be burned.

In March 2024 Westpac was involved in a whopping $9.2 billion loan to GE Vernova. This loan coincided with General Electric spinning off GE Vernova, a company specialising in the energy sector.

Despite the company’s name meaning “new green”, it has vast fossil fuel holdings and its business strategy includes building out an enormous amount of new LNG power plants in Bangladesh and Vietnam. In the Chattogram region of Bangladesh alone, gas or LNG projects with GE involvement would add approximately 430 million tonnes of carbon dioxide equivalent (CO2-e) to the atmosphere throughout the plants’ operational lives, over four times the CO2 the country emitted in 2022.

Because GE Vernova is involved in gas-fired power generation and supplying equipment to gas power stations (rather than the extraction of the gas itself), it is exempt from Westpac’s requirement that certain fossil fuel customers have a Paris-aligned transition plan to continue receiving finance. That means Westpac may carry on funding GE Vernova indefinitely despite its prolific role in the massive gas expansion occurring in the Asia Pacific. This clearly shows that these banks’ existing policies are not good enough.

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, expansions or extensions of thermal coal mines.

Corporate finance policy: Rules out corporate lending to companies that earn more than 15% of their revenue from thermal coal mining.

Bonds policy: Rules out arranging bonds for companies that earn more than 15% of their revenue from thermal coal mining.

Metallurgical coal:

Project-level finance policy: Rules out project finance for greenfield (new) metallurgical coal mines, but not expansions or extensions of existing 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: BHP

Which banks are they lagging behind?

Corporate finance and bonds:

La Banque Postale has committed to not provide finance to coal companies that are developing new coal-related projects.

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: Doesn’t rule out corporate lending to companies building or expanding coal power.

Bonds policy: Doesn’t rule out arranging financing companies building or expanding coal power.

Which banks are they lagging behind?

CommBank: which has ruled out providing corporate finance or ‘bond facilitation’ to companies that are proposing to expand or are expanding their coal-fired power generation capacity.

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, Woodside, 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.

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: Rules 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: JERA, GE Vernova, Woodside, Global Infrastructure Partners (Pluto 2 LNG Train)

• 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

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.

Westpac reported fossil fuel exposures include:

Oil and gas extraction and terminals (LNG), Oil and gas exploration, metallurgical coal mining and metallurgical coal in diversified miners, thermal coal miners, coal ports, gas-fired electricity generation, black and brown coal-fired electricity generation, ‘liquid fuel’ for electricity generation, oil and gas refining, oil and gas distribution and retail.

Westpac updated its exposure reporting in 2020 in the current format, making prior year comparisons non-comparable. Westpac no longer reports on its specific exposure to ‘coal rail’.