8 December 2017
Westpac today all but confirmed it would not refinance the Abbot Point coal terminal, striking another blow to the crippled Adani coal mine. Climate related questions dominated the opening of question time at the bank’s annual general meeting in Sydney, revealing a lack of awareness around its lending to climate offenders. The board became increasingly vague when questioned on its lending to highly exposed companies operating in the energy sector and revealed a level of hypocrisy within its own climate policy.
The bank released a Climate Change Position Statement in May which made clear it would not lend to new coal projects that did not meet stringent emissions guidelines, the Adani mine would not meet these conditions. In response to a shareholder’s question in relation to refinancing the Abbot point coal terminal, Chairman Lindsey Maxwell said he couldn’t comment on individual customers but that the bank’s lending is in line with its climate position. Westpac’s position takes into account the whole supply chain which would incorporate any infrastructure such as the terminal. Watch below.
The news comes as another blow to the Adani coal mine project which earlier this week was ruled out by three major Chinese banks, as well as the China Machinery Engineering Corporation (CMEC). Although Westpac indicated it was unlikely to refinance the coal terminal in October, today’s confirmation is further indication that Adani’s mega mine is considered toxic in the lending sphere.
Despite this good news, shareholders refused to let the bank slide in regards to other climate related discrepancies, noting that Westpac had contributed to a $1bn corporate refinancing deal for Whitehaven’s Maules Creek mine earlier in the year. A shareholder pointed out that Whitehaven bases its own coal mining projections on a six degree warming scenario, one that directly contradicts the two degrees Westpac purportedly seeks. Similarly, whilst Westpac considers climate change a material risk, it has been lending to highly exposed companies like Cooper Energy and Senex who have no climate risk management strategy.
The board appeared sheepish at being directed to this hypocrisy and indicated it didn’t know about Whitehaven’s projections and other company policies whilst attempting to avoid the topic. Unfortunately for Westpac it has a duty to be as informed about a company and its subsequent projects when it agrees to lend a billion dollars. The bank’s evasion of the subject will undoubtedly fail to inspire trust in customers and shareholders concerned about climate change.
A question relating to Westpac’s refinancing of fossil fuel explorer Oil Search’s corporate facility outlined the bank’s continued lending to other fossil fuel projects. The board stated that, should any new gas or oil lending opportunities present themselves,Westpac would consider them. Maxwell confirmed that no blanket ban would be placed on such fossil fuel projects. With new research indicating that gas may not be the clean fuel it is advertised to be, and reports that many oil and gas reserves may be stranded assets, Westpac’s willingness to invest in such industries is worrying.
The chairman of the board noted that whilst the company hadn’t made any pronouncements on gas or oil he expected the bank’s exposure to fossil fuels to decrease over time. As alarming reports outline the already prominent impacts climate change is having on the globe, that time needs to be now.