Market Forces warns banks continue to support gas projects through bonds

ANZ and Westpac may face shareholder ire at their AGMs after Market Forces pointed the finger at the banks for their continued support of gas projects through bond programs.

Climate lobby groups are warning that Australia’s big banks continue to fund carbon-intensive business projects, despite public commitments not to do so.

Market Forces has criticised ANZ and Westpac for helping to place a $US847m bond for gas company Santos in September, warning the deal was at odds with climate goals. The investment grade corporate bond saw a consortium of banks secure funding for Santos.

Westpac and ANZ were among four co-placement agents, junior partners on the mammoth bond, alongside Japanese banks MUFG and SMBC.

Citi, Deutsche Bank, Mizuho and Royal Bank of Canada acted as joint lead placement agents on the bond, which was pitched at the US market. The bond has a 6.875 per cent coupon and Santos will pay investors semi-annually.

ANZ and Westpac have made a number of commitments to transition high-carbon-emitting customers off their books in the face of shareholder concern.

ANZ and Westpac have given customers a deadline of October 2025, similar to goals laid out by rivals NAB and CBA.

But Market Forces banks campaigner Kyle Robertson said ANZ and Westpac were failing shareholders by continuing to act on deals for companies with high greenhouse emissions.

Mr Robertson said that despite its public commitments to clean up its lending, ANZ was still working closely with carbon-intensive industries in securing long term funding.

“ANZ has failed to rule out bonds, long-life finance that could fund fossil fuel companies without credible emissions reductions plans for decades in the face of climate catastrophe,” he said.

“ANZ is the biggest Australian funder of fossil fuel expansion, providing $11.1bn in loans to companies … since the signing of the Paris Agreement.”

Mr Robertson said Westapc, which had also announced plans to no longer fund coal, oil or gas projects, “had gone backwards” by assisting Santos.

“Every delay is costly as Westpac has recently financed some of the world’s highest-emitting companies like Santos, Woodside and JERA, whose new oil and gas projects threaten a safe and secure climate and future for all of us,” he said.

A Westpac spokesman said the bank was unable to comment on individual customers, but noted changes to the bank’s policies, which previously contained no reference to bond facilitation.

The changes now see Westpac commit to continue corporate lending and bond facilitation to customers with a “credible” transition plan put in place by September 2025.

“In November we updated our climate change position statement, setting emission reduction targets in eight of nine priority sectors under the Net Zero Banking Alliance, including oil and gas,” the spokesman said.

An ANZ spokeswoman said the bank had a “rigorous approval process for transactions in the energy sector, which incorporates consideration of social and environmental issues”.

The banks’ support of companies like Santos is expected to be a key issue at their upcoming annual general meetings.

Westpac is set to face shareholders on Thursday and NAB on Friday. ANZ will face investors on December 21.

Mr Robertson warned that shareholders would hold bank management to account “for using bonds and other available options to finance companies that are developing new fossil fuel projects”. “Shareholders have joined with Market Forces to file resolutions at Westpac and NAB and a member statement at ANZ, all demanding the banks demonstrate how their finance for fossil fuel companies is aligned with global climate goals,” he said.

Shareholders will be called on to support Westpac’s climate change position statement and action plan. But Westpac has urged shareholders not to support a two part motion which calls on the bank to disclose elements of the bank’s work with customers on their transition plans.