Commonwealth Bank has been given FAIL grades in all four categories of a new study into international banks’ fossil fuel lending policies. With no publicly disclosed policies to restrict coal mining, coal power, LNG exports or extreme oil, Commonwealth Bank found itself at the bottom of a pile of 37 international banks, receiving an F in all four categories.
Commonwealth Bank wasn’t the only Australian bank to receive straight “F”s, as NAB received the same marks. But two key differences set Commonwealth Bank apart as the worst of Australia’s banks on managing their fossil fuel lending.
The first is that Commonwealth Bank loaned $4 billion to the dirty coal, oil and gas sectors in 2016, more than any other bank in Australia.
And while NAB has ruled out funding the Adani Carmichael coal mine, Commonwealth Bank has not only failed to do this, but is already in business with Adani as a transactional banker, and a lender to their coal export terminal at Abbot Point.
Worst of a bad bunch
A new report compiled by international environment groups graded 37 banks on four aspects of their fossil fuel lending policies: extreme oil (including tar sands, ultra deep water and arctic drilling); coal mining; coal power; and liquified natural gas (LNG).
As shown in the table, Commonwealth Bank and NAB were two of the 11 banks that received FAIL marks in all four categories, meaning the banks have no policies that restrict lending to those areas.
Westpac’s recent policy update saw the bank score C- grades for coal mining and coal power policies. But the bank lacks policies for extreme oil and LNG lending, so failed in those two areas.
ANZ’s weak extreme oil, coal mining and coal power policies received D-, D- and C- scores respectively, while the bank failed in the LNG category.
No bank managed to score higher than a B in any field, and the worst performers were generally from Australia and Asia.
So while there are no real shining lights when it comes to climate policy in the international banking industry, Australia’s banks are clearly well below average.
Without a single concrete public policy to restrict lending to any fossil fuel sector, Commonwealth Bank and NAB are the worst of this bad bunch.
|Bank||Region||Extreme oil||Coal mining||Coal power||LNG|
|Sumitomo Mitsui Financial Group||Asia||F||F||F||F|
|Mitsubishi UFJ Financial Group||Asia||F||F||F||F|
|Mizuho Financial Group||Asia||F||F||F||F|
|China Construction Bank||Asia||F||F||F||F|
|Bank of China||Asia||F||F||F||F|
|Agricultural Bank of China||Asia||F||F||F||F|
|BPCE / Natixis||Europe||F||B||B||F|
|Wells Fargo||North America||D+||B-||D||D-|
|Morgan Stanley||North America||D-||B-||C||D-|
|JPMorgan Chase||North America||D||B-||C||D-|
|TD Bank||North America||D-||C+||D-||D-|
|Goldman Sachs||North America||D+||C-||C||D-|
|Scotia Bank||North America||F||F||F||F|
|Bank of Montreal||North America||D-||D-||D-||D-|
|Bank of America||North America||D-||B-||C-||F|
Show me the money
While polices are important in keeping money out of fossil fuels, we also need to look at the lending figures to get a complete picture of where the banks are at.
And that picture looks particularly bleak for Commonwealth Bank. In 2016 alone, CommBank loaned $3.9 billion to fossil fuel projects and companies, the most of any Australian bank by far.
The next highest fossil fuel lender was ANZ, with a 2016 total of $3.2 billion. This shows that, while ANZ may have some policies in place, they are far too weak to drastically restrict funding of dirty projects.
Wetspac, which didn’t have their current coal mining and coal power policies in place in 2016, loaned $1.4 billion to fossil fuels that year.
Interestingly NAB, which does not have any policies restricting fossil fuel finance was the lowest lender to the sector of the big four banks in 2016. While the $1.4 billion they did loan was still way too much, the stats show that actions can sometimes speak louder than words.
CommBank – Last bank standing on Adani?
As if to underline how far behind its peers CommBank is, it is now the only one of Australia’s big four that has not indicated they don’t plan to fund Adani’s monster Carmichael coal project.
The massive mine and associated infrastructure project would open up Queensland’s Galilee Basin, one of the biggest coal reserves in the world, with devastating impacts for the environment, water, climate and culture.
In 2015 NAB said it would not fund the project, while Westpac’s 2017 policy update effectively ruled it out. ANZ’s CEO Shayne Elliot last year said he didn’t see how the bank would squeeze Carmichael into a declining coal mining profile.
So that leaves CommBank – the bank that is failing in all four climate policy areas, the bank that loaned more to fossil fuels than any other Australian bank last year – as the last of the “big four” standing on Adani.
Use the form to tell CommBank to rule out financing Adani, and update their policies to bring an end to all fossil fuel lending.