Melbourne, 4 August 2016
Australia’s major banks have made a mockery of their ‘two degree’ commitments by pouring AU $5.6 billion into the expansion of the fossil fuel industry in the months since the December 2015 Paris climate change agreement.
New research released today by financial activist group, Market Forces, lays bare how financial institutions’ pledges lack substance, with all four banks failing to satisfy the most basic criteria: ending finance for projects that expand the fossil fuel industry.
“Australia’s big four banks have failed to deliver on their policies announced to great fanfare in the lead up to the Paris Climate Conference,” said Julien Vincent, Executive Director of Market Forces.
“For the world to hit the agreed target of staying under two degrees of warming, there is no conceivable room for the fossil fuel industry to expand. Yet in spite of their commitments, that’s exactly what the banks are financing.”
“To claim they will play a role in helping meet the urgent goal of holding global warming to below two degrees and then enabling the fossil fuel industry to further expand is either incompetence or just cynical greenwash. Either way, the banks’ policies and actions need to quickly fall into line with their two degree commitments.
Since their Paris announcements, the “big four” banks (ANZ, NAB, Commonwealth Bank and Westpac) have collectively loaned AU $5.6 billion to fossil fuel projects and companies around the world.
The largest single lender is Commonwealth Bank at $2.2 billion, followed by $2.1 billion from ANZ, $900 million from Westpac and $400 million from NAB. This takes total lending to fossil fuels by the “big four” banks to over $70 billion since 2008.
Deals include NAB facilitating an intercompany loan between beleaguered coal miner Peabody and their Australian subsidiary, which the company is claiming will enable the expansion of their Wambo coal mine in the Hunter Valley.
In April this year, ANZ arranged a $512m loan to InterOil for resource appraisal at “one of Asia’s largest undeveloped gas fields, Elk-Antelope”. ANZ loaned $128m to the deal whilst Westpac put in $90m.
And despite the environmental disaster caused by the nearby Horizon disaster in 2010, in November 2015, CommBank even loaned $49 million to the Heidelberg deep water drilling project, 1620m below sea level around 225km off the Louisiana coast in the Gulf of Mexico.
The latest figures also dwarf the $1.5 billion invested into renewable energy, with only NAB having a positive ratio in terms of clean to dirty energy finance. This is in stark comparison to global trends, with clean energy attaining twice as much finance as fossil fuels in 2015, according to Bloomberg.
Since the Paris Agreement, for every $1 invested in renewables, Westpac has loaned $11.60 to fossil fuels, ANZ $10.10 and CommBank $4.25.
“Australia’s banks are well behind the curve globally,” said Vincent. “It’s extraordinary that while the rest of the world doubles down on renewables, ANZ and Westpac continue to invest ten times more money into fossil fuels than into clean energy.”
Market Forces is organising a day of action on the 8th of October, calling on customers to leave their bank in protest at the ongoing support for the fossil fuel industry. To date, customers worth over $500 million in savings alone have put their bank “on notice”, warning that unless the banks stop lending to fossil fuels, customers will take their business elsewhere.
“Thousands of customers have given the big banks a choice: them or the fossil fuels. Sadly, the banks have chosen more fossil fuels, and now it’s up to customers to use their most powerful argument – their accounts – to try and convince the banks to change their ways.”