11 December 2020
Westpac’s board knew they would be facing tough questions from shareholders at today’s annual general meeting (AGM) given the banks’ continued funding for Australia’s most climate-destructive companies, including Whitehaven Coal and Santos.
The bank’s updated climate policy, released in May, was a step forward as it pledged to exit thermal coal by 2030 and indirectly committed to not finance any new oil and gas projects. However, this wasn’t enough to prevent Westpac’s continued funding of companies whose business plans would spell the failure of the Paris Agreement because they are either:
- Expanding the scale of the fossil fuel sector; and/or
- Relying on scenarios consistent with the failure of the Paris Agreement to justify their future business prospects.
Westpac still open to funding climate-destructive companies
Just last month, Westpac committed US$25 million to dirty gas company Santos, which is pursuing the highly opposed Narrabri Gas Project. In a submission to the planning process, Australia’s former chief scientist Penny Sackett said the project should be blocked.
“About 50 per cent of Australian gas reserves must remain in the ground to achieve a 2°C [global warming] scenario. Thus, approval of new fossil fuel development or expansion is incompatible with keeping global warming to 2°C, and will `lock in’ emissions and warming far beyond the end of mining operations.”Australia’s former chief scientist Penny Sackett
Given Westpac’s proclaimed support for the Paris Agreement, our banks campaigner Jack Bertolus asked how Westpac justifies funding companies whose business plans rely on the Agreement’s failure:
Chairman John McFarlane’s response was paradoxical, telling shareholders the bank is committed to the Paris Agreement but that it has “found the best position on this matter for the moment”. Given this position is clearly misaligned with the Paris Agreement, it remains entirely unclear how Westpac reconciles its funding for companies expanding the fossil fuel industry with its support for the Paris Agreement.
Impacted shareholders – Whitehaven
Shareholders impacted by these climate-destructive companies took the time to attend the AGM and raise their concerns with the bank directly.
In February, Westpac was part of a banking syndicate that loaned $1 billion to Whitehaven Coal, a company expanding the dirty coal industry by pursuing new projects such as the Winchester South coal mine.
Shareholder David, a farmer from Boggabri, told the bank Whitehaven’s planned expansions will threaten the groundwater relied upon by himself and the community, and asked what the bank had done to ascertain the concerns of impacted landowners.
Chairman John McFarlane ignored the question, opting instead to make the entirely irrelevant point that Westpac can’t comment on specific customers, even though Dave had not asked or suggested the bank make such comments. McFarlane also told shareholders he can’t comment on the individual situation Dave referred to, without explaining why not.
Retired agronomist and now cattle farmer Stuart Murray asked why Westpac continues to fund Whitehaven given it’s so clearly inconsistent with the bank’s climate rhetoric:
Stuart’s concerns were dismissed, with McFarlane telling shareholders simply that Westpac had made a statement on coal in its disclosures and that he had already answered Stuart’s question.
Impacted communities – APA and Santos
Westpac was part of a syndicate that loaned $1 billion to dirty gas pipeline company APA in May 2018. It also participated in a US$750 million loan to Santos just last month.
Mother of 5, business owner and farmer from Coonamble, Rowena, asked whether Westpac would commit to stop this type of funding until these companies abandon their destructive fossil fuel proposals:
Chairman John McFarlane told Rowena he was sorry to hear of her issue and to look at Westpac’s climate change position statement.
Oil and gas policy
Westpac’s latest sustainability report states the bank will develop lending criteria and portfolio targets for the oil and gas sectors that are aligned with the Paris Agreement. However, the bank provides no indication when these will be published.
Asked by a shareholder when Westpac will publish the criteria and targets, McFarlane was very open and honest, telling shareholders the bank doesn’t have the answer.
“To meet the upper Paris goal (‘well below 2C’), we must achieve net zero emissions by 2040-2050. This requires a rapid phase-out of existing fossil fuel infrastructure, leaving no room for expansion of the gas industry.”25 leading scientists at Australian universities and institutions
Given there is no room for new oil and gas infrastructure if we’re to limit warming to 1.5°C, another shareholder asked when Westpac will directly commit to stop funding companies and projects expanding the oil and gas industry:
McFarlane dodged the question, instead telling shareholders the bank sees gas as a so-called ‘transition fuel’ and that he thanks Westpac has found the ‘sweet spot’ in terms of its approach. If the ‘sweet spot’ means funding climate failure, then it certainly has!
A report published last week, co-authored by the United Nations Environment Programme, found that global oil and gas production must decline annually by 4% and 3% respectively to be consistent with a 1.5 degree pathway.
Westpac’s latest Sustainability Report shows its Total Committed Exposure (TCE) to oil and gas extraction declined 15% in the year to September 2020. Given this drop in exposure, another shareholders asked whether the bank expects this exposure to continue declining in line with Westpac’s commitment to the Paris Agreement:
Chairman John McFarlane’s response was evasive and non-committal, providing no direct response to the question. Strangely, McFlarlane instead told shareholders that Westpac’s exposure is a matter for Westpac’s customers (as well the bank itself). This statement makes very little sense considering that Westpac decides who it lends to and on what terms, and that it has already committed to exit another fossil fuel, thermal coal, by 2030.