Aussie banks accused of ignoring Paris Agreement

Australia’s big four banks have been accused of “not operating in line with their commitments” to the Paris Agreement on climate change and failing to stop financing fossil fuels.

A study from Market Forces, an NGO linked to Friends of the Earth, claims that the banks are continuing to bankroll fossil fuel projects at a much higher rate than funding for renewable energy projects.

It accuses ANZ, Commonwealth Bank of Australia (CBA), National Australia Bank (NAB) and Westpac of providing “direct project finance for 13 new fossil fuel projects since committing to 2°C. During their lifetimes, these projects are expected to emit 3.4 billion tonnes of CO2 – enough to cancel out Australia’s emissions reduction commitment (2005-2030) almost three times over”.

It claims that since their 2°C commitments, the big four have loaned 2.5 times more to fossil fuels than to renewables, saying:

  • “During that time, ANZ had by far the worst lending ratio of the big four, providing A$6.80 to fossil fuels for every dollar loaned to renewable energy.
  • CBA’s lending ratio of A$4.15 : A$1 is completely inconsistent with its promise to ‘play a role in supporting the transition to a low carbon economy’.
  • Westpac has loaned over three and a half times as much to fossil fuels than renewables since it’s Paris commitment.
  • While NAB’s fossil fuels to renewables ratio was the best of the big four banks, it still favoured dirty power sources. What’s worse, the bank’s ratio has tipped further towards fossil fuels since we last conducted this comparison at the end of 2016.”

The report did find, however, that not a single coal project has been funded directly by the big four.

Despite this positive caveat, two of the banks involved have vigorously contested the data and the findings. A number of bank officials told GTR that they did not know how Market Forces came up with the figures, but that they do not recognise them as reflecting their own deal book.

A senior official at one of the banks said that its own claims on sustainability, as part of its official policy, are audited and transparent, whereas Market Forces have not sufficiently explained the methodology behind their own data.

In a written response to questions from GTR, a spokesperson from CBA says that the bank remains committed to the Paris accord and that “our actual direct exposure to coal mining has declined and our support for gas as a transition fuel, and for renewables, have increased”.

They add: “As of December 2016, our exposure to renewable energy generation was A$2.3bn, up from A$1.7bn a year earlier, approximately five times our lending to coal-fired generation. In the last few months alone, we have been involved in financing Australia’s largest ready-to-build solar farm and New South Wales’ biggest wind farm, in addition to issuing our first climate bond.”

A Westpac spokesperson, meanwhile, says that it was the first bank to recognise the importance of limiting global warming to less than 2°C. They have increased their renewables lending target from A$6.2bn to A$10bn by 2020 and A$25bn by 2030.

They add: “The mining sector as a whole makes up 1.2% of our total lending. Our exposure to the mining sector, including oil and gas extraction and coal mining, dropped from A$14.4bn at FY15 to A$11.3bn at FY16. In addition, any lending to new thermal coal projects is limited to existing coal producing basins only, and where the energy content of the coal ranks in the top 15% globally.”

After the Paris Agreement was signed in 2016, a raft of banks signed on to cut the emissions in their financial supply chains. In many cases, this meant no funding for new coal-fired plants.

A recent report found that the effects were immediate, and that the level of extreme fossil fuel financing by banks fell by 22% in 2016, but also that many banks are still increasing their lending to destructive sectors.

Within this report CBA and NAB were given the worst possible score-cards for financing fossil fuels. The report also found that ANZ had actually increased their financing for “extreme fossil fuels”, in the period since the Paris Agreement was signed.

You can read the report from Market Forces here

The post Aussie banks accused of ignoring Paris Agreement appeared first on Global Trade Review (GTR).


Source: GTR

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