We all have an urgent part to play in tackling the climate crisis.
But banks have an especially crucial role.
That’s because they have a unique ability to direct billions of dollars away from climate-wrecking fossil fuel projects – and into climate solutions like clean energy exports.
So while Australia’s biggest banks have all publicly committed to climate action, how do those promises actually stack up?
Our new benchmark of climate commitments – From laggards to leaders: An assessment of Australian banks’ climate commitments – puts the performance of Australia’s five biggest banks under the spotlight.
In an Australian-first, we ranked Commbank, Westpac, Macquarie, NAB and ANZ across four key themes: their climate targets, strategy and action, reporting and governance.
It’s a shocking scorecard.
What did our benchmark of banks’ climate commitments find?
- None of Australia’s five biggest banks scored above 63 out of a possible 100.
- ANZ stands out as the worst performing bank – scoring just 34.7 out of 100.
- All big five banks have committed to net zero, but there remain big gaps between their headline commitments and the policies and practices to get there.
- Big five bank policies on fossil fuel lending exclude most of the ways they raise finance for the coal, gas and oil sectors, leaving loopholes to continue financing fossil fuels.
- None of the banks have a policy to restrict lending to companies building new oil or gas.
- Australia’s banks are not fully integrating action on climate change into their governance – for example by making it a board-level priority and incentivising senior management to achieve climate action targets.
There are signs of progress made by individual banks: Macquarie is the only bank to restrict lending to companies building new or expanded coal projects. Commbank is the only bank to prohibit direct lending to new oil and gas projects.
Commbank has also recently set a new bar for the Australian banking industry by saying it will require its customers to develop transition plans by 2025 and explaining how it will assess those plans.
But none of the banks in our benchmark of banks’ climate commitments have a fully-fledged plan to get to net zero – and that’s not good enough.
This is especially true of the worst performer in our benchmark – ANZ.
ANZ’s weak climate policies continue to channel billions of dollars into new and expanded coal, oil and gas projects. It’s also the only bank in our benchmark which has not disclosed any analysis of how it will be impacted by climate change and the transition to net zero.
We need to let ANZ know now that it must lift its game.
Banks must invest in climate solutions
Our communities and precious living world are threatened by the mining and burning of coal, oil and gas. Science tells us that if we act fast to slash emissions, we still have a chance of avoiding the most catastrophic impacts of climate change.
Australia can choose to become a global leader in climate solutions and clean exports by tapping into our abundant wind, sunlight and know-how, creating around 400,000 jobs and transforming our economy.
As Dr. Ken Henry, former NAB Chair and former Secretary of the Department of the Treasury, points out in our benchmark’s foreword, banks can’t ignore the climate crisis.
“Both climate change and the economic transformation catalysed by action to mitigate it, will reshape the balance sheets of Australian banks. Some will fare better than others.” Dr. Henry says.
“Importantly, Australian banks don’t have to be mere passive actors in this transformation. They are, themselves, major players in the Australian economy, and they know it.”
We know it’s still going to take plenty of public pressure and scrutiny to push big banks to stop bankrolling climate-wrecking fossil fuels.
That’s where we need your help, to make sure banks do the right thing, right now, for a safe climate and a thriving economy.
So what can you do?
- Read our benchmark of banks’ climate commitments and its 19 recommendations for change, and share it with your friends, family and networks. Let’s move the money!
- Email ANZ - the worst laggard - urging faster and stronger climate action.
Banks care about their public image and are already responding to people-powered pressure. After communities around Australia put pressure on banks to stop funding Whitehaven Coal for over a decade, Whitehaven became the first Australian company to lose its billion-dollar funding from all Australian banks.
And Commbank recently decided to strengthen its climate policy, limiting lending to new oil and gas projects and putting the spotlight on laggard banks like ANZ.
That's two huge people-powered wins. Let's build on that momentum!
