ANZ to stop funding oil and gas extraction

Tucked away at the back of its recent results, the lender revealed it will now only fund new oil and gas extraction projects in the event of a national emergency.

ANZ’s 2023 AGM saw protesters break out with circus performers. Picture: Arsineh Houspian

Australia’s biggest corporate and institutional lender has quietly moved to block lending to new or expanded oil and gas projects, with ANZ bank revealing in its half year results on Tuesday it would only extend funding in the event of a national emergency.

Tucked at the back of ANZ’s results pack was a warning to the bank’s oil and gas customers saying the bank would no longer fund new or expanded upstream projects.

This will see the bank walk away from backing new oil and gas drilling projects, including the widely touted $US10bn ($15bn) PNG LNG project, backed by TotalEnergies, Santos and ExxonMobil.

However, ANZ will still fund midstream projects, including pipelines or liquefaction plants.

ANZ told investors although it believed “gas plays a material and important part in meeting Australia’s current energy needs and will do so for the foreseeable future,” the bank would move to block further funding for extraction projects.

The move puts ANZ in line with its Australian banking rivals.

ANZ CEO Shayne Elliott. Picture: Arsineh Houspian

But, ANZ said it would now only lend to new oil and gas projects on national energy security grounds and if its assistance was directly sought.

“We will consider exceptions on a case-by-case basis,” the bank said.

However, ANZ will continue to supply overall corporate financing to oil and gas players, but will closely scrutinise companies using its funding if they seek to put the cash towards extraction projects.

ANZ said it supported oil and gas companies “who have credible, disclosed transition plans,” requiring they have “well developed” status by 2025.

ANZ has de-banked coal producer Whitehaven, but continues to bank several oil and gas companies throughout Asia.

The bank said it would work with energy customers “with robust plans aligned with our climate policy framework, to help finance their transition whether that be through direct financing or general corporate facilities”.

This comes after ANZ kicked off a new round of engagement with its 100 largest emitting customers in October last year, in part tied to the banks reporting obligations under the safeguard mechanism.

This requires these 100 high emitters to disclose their transition plans and obtain third party assurance of their emissions performance and targets.

This will come prior to mandatory emissions reporting obligations due to come into effect at the end of the year, under a proposed scheme from the Albanese government.

ANZ will be one of the companies required to begin reporting under the first stage of the emissions disclosure scheme.

The bank has already disclosed plans to cut its emissions by 26 per cent by 2020, with a goal of reducing its exposures to greenhouse gases by 40 per cent by the end of 2025.

Climate lobby group Market Forces hailed ANZ’s move as a win from its campaigns against bank funding of oil and gas projects.

Market Forces has targeted several banks, organising protests at annual general meetings, as well as curly questions for boards and directors.

A group of clowns, backed by Market Forces, attended ANZ’s annual general meeting in December last year.

Market Forces targeted ANZ, warning the bank was the largest funder of oil and gas projects in Australia, putting forward a shareholder resolution to demand details on the bank disclosed climate matters.

Market Forces banks analyst Kyle Robertson said ANZ’s move to cease funding upstream projects put in peril Santos’ PNG LNG project.

“ANZ has delivered a massive blow to Santos, TotalEnergies and ExxonMobil which are struggling to get Papua LNG off the ground,” he said.

“ANZ has closed the window on directly funding new oil and gas extraction, but has still left the door wide open to bankroll companies expanding fossil fuels.”

Originally published as ANZ to stop funding oil and gas extraction