Westpac, which has committed to net-zero emissions by 2050 and the goals of the Paris Agreement, revealed an 11% increase in FY22 of its overall exposure to fossil fuels, with the increases attributed to customers in the coal rail transportation, LNG terminal, and oil and gas sectors.
Westpac cited that the reasons for the increase “have in part been driven by commodity prices and exchange rate fluctuations, particularly in sectors where customer exposures are predominately denominated in USD, such as the Oil and gas sector.”
However, Westpac did not explain why its exposure to LNG terminals increased by 33% and coal rail transportation by 163% this year.
Expanding oil and gas distribution
Whilst there was a decrease in exploration and coal mining exposure, there has been a marked increase in lending to midstream fossil fuel infrastructure, which depends on ongoing and additional coal, oil and gas production. The most prominent example being Westpac’s participation in a loan facilitating the Pluto 2 LNG project, which will process gas from Woodside’s climate wrecking Scarborough gas field.
It’s important that Westpac recognises fossil fuel distribution relies on fossil fuel production and consumption, and expanding exposure to this part of the fossil fuel supply chain is an endorsement of both the extraction of coal, oil and gas, as well as their sustained combustion. A bank truly committed to the Paris climate goals would be phasing down exposure to fossil fuels across the board, and withholding financing to any company seeking to expand coal, oil and gas.
Flood response funds outweighed by flood-worsening fossil fuel deals
Westpac touted its flood response as symbolic of Westpac’s willingness to “assist when people call on us for help, whether they’re facing a natural disaster or personal crisis.” According to its Sustainability Supplement, Westpac established a $2 million fund to help small businesses impacted by the floods in Queensland and New South Wales. This is less than the amount of fees Westpac made by arranging just two loans for the climate wrecking Pluto 2 LNG project and for the company developing the enormous Scarborough gas field to feed the project, Woodside Energy.
That Westpac is spruiking its social responsibility credentials with small efforts such as its flood response fund, whilst raking in fees from fossil fuel deals that will continue to exacerbate extreme weather events like flooding, is complete hypocrisy.
This year, a critical shareholder vote will be held, asking Westpac to demonstrate how its financing will not enable the expansion of the fossil fuel industry. These results only serve to underscore the need for shareholders, customers and the wider community to hold Westpac accountable for the climate impacts of its financing.