ANZ has just announced important changes to its carbon policy, to support the transition to a net-zero emissions economy by 2050.
“Our new approach recognises the important role we play and commits us to taking strong action to support the Paris Agreement,” the bank said in a statement today.
“These new measures will underpin our risk management efforts and position us well ahead of anticipated regulatory change. They build on work already underway to support 100 of our largest emitting customers in the energy, transport, buildings, food, beverages and agribusiness sectors to manage and disclose their transition plans.”
“It’s important to recognise that these changes are focused on supporting large institutional customers in their transition and won’t have any impact on the bank’s farmgate lending practices,” ANZ said.
The bank highlights that it is committed to:
- Broadening its engagement with their largest emitting customers to include major oil and gas companies within the energy sector, to support their transition plans.
- Disclosing more robust and credible metrics so the emissions impact of their financing can be tracked annually, starting with commercial property and power generation.
- Allocating $A1 billion of their existing 2025 $A50 billion sustainable finance target towards supporting customers and communities’ disaster recovery and resilience. ANZ plans to achieve this by allocating capital to fund or facilitate resilience initiatives for weather-related events, or to build resilience against non-weather related disasters such as pandemics.
- Strengthening their thermal coal policies in the following ways:
- Focusing on supporting diversified customers and no longer banking any new business customers with material thermal coal exposures, meaning more than 10 per cent. This is down from the current 50 per cent threshold;
- For existing customers who have more than 50 per cent thermal coal exposure, ANZ will engage with them to seek specific, time-bound and public diversification strategies. If they do not have this strategy by 2025, the bank will cap limits and reduce their exposure over time. By 2030, this threshold will reduce to 25 per cent;
- By 2030, ANZ will only directly finance gas and renewable power generation.
ANZ’s decision to only directly finance gas and renewable power generation means that it will no longer directly finance any new coal-fired power plants or thermal coal mines, or expansions. The bank also plans to wind down any existing direct financing of these assets by 2030.
The move is significant as ANZ is the biggest lender to coal mining in Australia. According to Market Forces, since 2015, ANZ has loaned more than $10 billion to fossil fuels companies around the world. This includes $2.4 billion to the coal industry, more than any other Australian bank .
ANZ will also reduce its own emissions by sourcing 100 per cent of the electricity needed for the bank’s business operations from renewables by 2025.
Minister for Resources, Water and Northern Australia, the Hon. Keith Pitt MP, has criticised the bank’s decision, stating that while Australia is focused on economic recovery and getting back to work, ANZ’s priority is to “play environmental activist”.
“It is disappointing that ANZ is taking this decision. It is singling out industry sectors that continue to make a significant contribution to Australia’s economy – and ANZ’s wealth,” the Minister said.
“I’d suggest ANZ would be better off focusing on its core business and help the 1.2 million Australians employed directly or indirectly in the resources sector buy their own homes and cars, and invest for their future.”