11 August 2021
Despite supporting the Paris Agreement and the goal of net zero by 2050, CommBank’s annual report—released today—watered down an existing (albeit ineffective) barrier to funding expansionary fossil fuel projects, and gave climate-wrecking companies at least another four years to continue with business as usual.
The International Energy Agency’s (IEA) Net Zero by 2050 report clearly shows achieving this goal means no expansion of the fossil fuel industry.
TAKE ACTION! Contact CommBank using the form on this page – let the bank know it must rule out funding expansion of the fossil fuel industry.
As a result, a Market Forces-coordinated resolution has today been lodged with CommBank, calling on the bank to no longer fund expansion of the fossil fuel industry, and to set targets to reduce fossil fuel exposure consistent with net zero by 2050.
In 2019, CommBank committed to only fund new oil, gas and metallurgical coal projects if supported by an assessment demonstrating them consistent with the Paris Agreement. The commitment previously applied to all ‘Banking and Financing activity’ provided by the bank, but has been walked back to only cover ‘project finance’. This means the bank could now provide funding for such projects through other funding arrangements such as corporate finance (e.g. lending to a company for ‘general purposes’, which then uses the money to fund a new gas field), without needing to demonstrate the project aligns with Paris.
The commitment also previously applied to all ‘New oil, gas or metallurgical coal projects’, covering the transport and burning of fossil fuels for example, but has now been narrowed to only ‘oil, gas or metallurgical coal extractive activity’. Instead of watering down the commitment, compliance with which has been questioned by shareholders, CommBank must commit to stop funding expansion of the fossil fuel industry and actually do so.
The bank is also giving climate-destructive companies at least another 4 years to continue with business as usual, saying it “expects” existing fossil fuel clients such as Santos and Origin Energy to publish transition plans by 2025, but without stating the consequences of failing to do so.
Market Forces data shows CommBank loaned $12 billion for fossil fuels between 2016 and 2019, including $2.8 billion for projects that expand the fossil fuel industry. One of the projects funded is the 692km Permian Highway Pipeline in Texas, which would enable an estimated 1 billion tonnes of CO2 over its lifetime, equivalent to two years of Australia’s total greenhouse gas emissions.
More recently, the bank co-funded Santos’ acquisition of a 37.5% interest in the huge Barossa gas field proposal, which Santos sanctioned in March 2021 and has been labelled “a CO2 emissions factory with an LNG by-product”. Since January 2019, CBA has also funded numerous ASX300 companies with business plans consistent with the failure of the Paris Agreement, including AGL, Aurizon, Mineral Resources, Origin Energy and Santos.
Further weakening and undermining its climate commitments, CommBank also intends to align its ‘glidepaths’ (trajectories for the banks’ fossil fuel financing and financed emissions) for the coal, oil and gas sectors with the IEA’s Sustainable Development Scenario (SDS). This is despite the SDS being aligned with net zero by 2070 and allowing for expansion of the fossil fuel industry.
As the IPCC’s latest report demonstrates, the urgency of climate change and the need for rapid action to keep global warming from spiralling out of control has never been more apparent. We can’t afford half-measures from our financial institutions.
Tell CommBank to rule out funding expansion of the fossil fuel industry!