Shayne Elliott says ANZ cutting customers over climate change
ANZ chief executive Shayne Elliott revealed the bank has cut some big customers who have failed to recognise the reality of climate change.
ANZ chief executive Shayne Elliott said he was proud the bank had not lent “a dollar” to any coal miners since his appointment in 2016, and revealed it has cut some big customers who have failed to recognise the reality of climate change.
The big four bank, whose new 10-year climate policy sparked controversy amid fears it would hit farmers, said it stood by a decision to cut exposure to coal by 2030.
“We’re pretty proud of the fact that since I became CEO we’ve not lent one new dollar to the coal industry and our exposure has come down,” Mr Elliott told the Emissions Reduction Summit on Wednesday.
“That will continue to just run off. It’s not the sort of thing we can pull the pin on tomorrow – we have some contractual obligations – but that will run off.”
ANZ’s new climate policy is focused on the top 100 carbon emitters and will see it implement the most ambitious net zero emissions action of the big four banks, with climate change adopted as a condition of lending.
The bank has close to $1 trillion of funds to allocate around Australia’s economy and said it was no longer appropriate for banks to sit back and not engage on climate change issues.
“We got heavily criticised and I got criticised and you got this outrage that somehow we should stick to our knitting. And my response to that was: this is our knitting. This is actually what we do for a living,” Mr Elliott said.
“I think that’s success. Getting a little bit of outrage, to the best of our ability, we’d like to take that head on. It doesn’t worry me per se.”
The ANZ chief said the bank had ended some banking relationships with big customers who failed to properly plan and engage on climate change impacts.
“If we’ve got customers today that aren’t thinking about climate change, haven’t considered it in terms of their operations, what the risks are and what they should do about it, that’s a pretty big red flag to me that these are not good customers in the way they think about other issues,” Mr Elliott said.
“We haven’t really found too many laggards because as a general observation they have exited those relationships. There have been a couple and over the last few years we have moved away from those relationships. These people don’t get it and we can’t be involved.”
ANZ has met with 83 per cent of its big customers to discuss its new climate policy and “had no push back whatsoever,” Mr Elliott said. It has also received overwhelmingly positive support from institutional investors and the “big end of town”.
The bank also said federal government policy had led to a slowing of investment in the energy sector.
“These trends are there. Government policy is really an accelerant or decelerant,” Mr Elliott said.
“They can get in the way or they can actually help. And the question is which side of that do governments want to be. I think on the energy policy in general, it’s been a bit of a decelerant because of the uncertainty. Despite that, the trend is still intact. It’s just whether we really want to grab the opportunity.”
Mike Cannon-Brookes, co-founder of Atlassian and an increasingly influential figure in renewable energy, told the Summit investors were moving away from coal, adding it was no longer “voodoo” to discuss the financial risks of climate.
“Choosing not to lend money to coal is both a smart business decision and probably the right thing to do for the planet,” Mr Cannon-Brookes said. “It’s not that hard and gas will be next and oil will be next, it will move in that direction, and people will have to get used to that.
“Taking into account the financial risk of climate is not voodoo anymore. It’s relatively normal for banks all around the world. We just happen to be in a very complicated country to do that.”
The tech mogul and iron ore billionaire Andrew Forrest are joint lead investors for a $22bn clean energy venture that aims to send 10 gigawatts of power from the world’s largest solar farm near Tennant Creek to Darwin and then Singapore, via a 4500km high-voltage direct current cable, creating a $2bn annual renewable export industry.
Mr Cannon-Brookes said Australia and the Morrison government should embrace the transition underway to renewables.
“There are companies that didn’t know much about sustainability 50 years ago. And now we do, so this is where coal has become a very complicated issue. When we started mining it in Australia 80 or 100 years ago we had no idea about what it was or was not doing. Now we do know it’s a different thing,” he said.
“The frustrating thing for me is that we are very rearward looking. From an Australian business perspective, we should be saying for the economy as a whole this transition is going to happen and it is a massive opportunity.
“We get lost in all the political bullshit and the history of fossil fuels. On a personal level it’s incredibly frustrating that we don’t see that and embrace that. We can’t line all our resources up – that’s government, business, individuals and communities – to embrace that opportunity that we have as a country. I’ll keep yelling until it’s all lined up.”
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