Research finds big four banks loan $3.6 billion to fossil fuels projects and companies in 2023

Australia’s big four banks have loaned more than $3.6 billion to fossil fuels projects and companies in 2023.

Australia’s big four banks have loaned more than AU$3.6 billion to fossil fuel projects and companies in 2023, nearly a decade after the Paris Agreement was adopted globally, according to new research.

The Market Forces analysis found ANZ, NAB, Commonwealth Bank of Australia and Westpac loaned $3.6 billion to fossil fuels in 2023.

However, Australia’s biggest banks nearly halved their funding to fossil fuels between 2022 and 2023.

The big four banks have loaned AU$61 billion to fossil fuels projects and companies in 2023. Picture: NewsWire / Sarah Matray

The report found this decision was linked to Commonwealth Bank and Westpac announcing a number of exclusions on directly financing fossil fuel projects in 2023, with ANZ also making additional commitments for 2024.

Market Forces banks analyst and report author Kyle Robertson said it was important the Big Banks understood its customers didn’t appreciate greenwashing.

“Customers are very concerned that big banks are pouring billions of dollars into companies expanding coal, oil and gas when we must accelerate efforts to limit climate change and deadly disasters,” Mr Robertson said.

“The big four banks are engaged in a monumental facade as long as they continue undermining a safe climate by funnelling billions to companies steaming ahead with more coal, oil and gas.”

“When will the banks live up to their climate commitments, follow the science and stop funding climate collapse?”

Westpac loaned $784 million to fossil fuel linked companies in 2023. Picture: NewsWire / John Gass

The new research found 2023 was the first year the big four Australian banks did not directly finance a new or expanded coal, oil or gas project since the Paris Agreement was signed.

Mr Robertson said the big four banks continued greenwashing by providing almost 70 per cent of their fossil fuel lending to companies out of line with their climate commitments.

“ANZ takes the cake as the biggest funder of fossil fuels, pouring more than $20 million into coal, oil and gas since Australia adopted the Paris Agreement to limit climate change,” he said.

How the big four Banks compare:

ANZ

The report found ANZ loaned nearly $1 billion to companies developing new coal, oil and gas in 2023.

It has now loaned more than $20 billion to the fossil fuel industry, making it Australia’s biggest funder of fossil fuels since the Paris Agreement.

An ANZ spokeswoman told NewsWire it is committed to doing its part to transition the country to net zero.

“While we have significant questions about the methodology of the report, we are not surprised to be mentioned given we are the largest domestic lender to Australia’s energy sector,” she said.

ANZ ranked as the largest funder of fossil fuels. Picture: NewsWire / John Gass

“It’s important to remember this is the most carbon intensive part of our economy and financing its transition to net zero will require significant capital.

“It’s important also to note that our financed emissions included in our emissions reduction pathways for the power generation, oil and gas and thermal coal sectors have reduced by 25 per cent, 30 per cent and 96 per cent respectively, between 2020 and 2023.

“In line with our target, we will have largely exited all thermal coal miners by 2030, with remaining direct exposure largely due to mining rehabilitation bonds which will continue to be provided to existing customers to ensure their responsibilities with exiting mine sites are fulfilled.”

NAB

The analysis found NAB was the biggest Australian fossil fuel lender in 2023, loaning $1.4 billion to fossil fuels in total.

The funding also included $860 million to companies with coal, oil and gas expansion plans.

Westpac

Westpac loaned $784 million to fossil fuels companies in 2023, making it the third biggest lender.

Those loans included $533 million to companies expanding fossil fuels in 2023, including oil and gas giants JERA and APA Group, according to the report.

However, a Westpac spokesman told NewsWire 84 per cent of the major bank’s lending to the electricity generation sector is for renewables.

“We are the largest financier of greenfield renewable projects in Australia over the last five years to September 2023,” he said.

“We disclose our total exposure to industries in the fossil fuel energy value chain in our FY23 Climate Report.

Commonwealth Bank was found to have loaned $271 million in 2023 to fossil fuel companies. Picture: NewsWire / Roy VanDerVegt

“That shows approximately a 7 per cent decline in our exposure over the year to September 2023.”

The spokesman said the bank was committed to meeting emissions targets, after more than 90 per cent of Westpac’s shareholders endorsed the Climate Change Position Statement and Action Plan at the 2023 AGM.

“Westpac has set emissions targets in a range of sectors including thermal coal mining and upstream oil and gas and we’re working with customers on their transition to a net zero future,” he said.

Commonwealth Bank

Commonwealth Bank’s ranked fourth having loaned $271 million to fossil fuel companies.

The report found the bank loaned to APA Group, which is planning to construct pipelines on the Beetaloo Basin.

Meanwhile, the analysis found five biggest loans and bonds in 2023 were given to APA Group, Santos, Glencore, BHP and Japan’s largest power company JERA.

NAB and Commonwealth Bank have also been contacted.

Originally published as Research finds big four banks loan $3.6 billion to fossil fuels projects and companies in 2023