Global investors back lobbyists’ resolution Westpac come clean over over fossil fuel finance

Four of the world’s top investors, with a combined $1 trillion under management, have backed a Westpac shareholder resolution demanding it define how investments align with climate goals.

Westpac’s Thursday AGM in Sydney faces some significant lobbying. Picture Luis Ascui

Major global investors have turned up the heat on Westpac by backing a resolution that calls for the bank to make clear how its fossil fuel finance aligns with global climate goals.

Four of the world’s major investors – the largest public pension fund in the US, CalPERS, the New York City Pension Fund, Norway’s largest pension company, KLP, and the nation’s largest asset manager, Storebrand, which have a combined $1trillion under management – have backed a shareholder resolution spearheaded by climate lobby group Market Forces.

The resolution, which Westpac shareholders will vote on at the bank’s AGM in Sydney on Thursday, calls on the major lender to confirm that its funding for coal, oil and gas is aligned with its stated commitments to the climate goals of the Paris Agreement.

It demands that Westpac makes clear that its four-tiered customer climate transition plan system, which assigns a score of “A” through to “D” for new or renewed financing to fossil-fuel customers, makes clear that those rated “A”, “B” or “C” are aligned with the Paris climate goals. Those rated “D” would be declined new or renewed finance.

The changes, which Westpac unveiled in October, mean that any new or renewed financing for high-emitting sectors is conditional upon customers having Paris-aligned targets.

But Emergency Leaders for Climate Action founder Greg Mullins has accused Westpac of backsliding by “pushing the myth” that new gas mining is necessary in the shift to renewable energy.

“I’m gobsmacked that 10 years after the Paris Agreement was signed, Westpac is making green promises but still supporting the expansion of coal, oil and gas. It’s no longer just immoral, it’s economically reckless,” Mr Mullins said.

“Climate change is one of the biggest threats to our economy and the housing market that banks love so much.

“You’d think Westpac would be more concerned about protecting homes than fuelling fires that destroy them.”

Market Forces senior banks analyst Morgan Pickett questioned why Westpac could not follow the Commonwealth Bank and NAB’s lead by ruling out funding for oil and gas producers.

“Westpac brands itself as a climate champion, but behind the spin it is financing companies like Santos, Woodside and BP and their fossil-fuel expansion, putting Australians in the firing line of deadly fires, cyclones and flooding,” Mr Pickett said.

“Westpac has betrayed its shareholders and customers by scrapping its science-based climate policy and replacing it with one so full of loopholes it looks like Swiss cheese.”

The Westpac board said that 9 per cent of its in-scope customers would be rated “D” under its new system.

“...we are separately taking steps to achieve our financed emissions sector targets, including for power generation, upstream oil and gas and thermal coal mining,” the board stated.

“The sector targets support Westpac’s ambition to become a net zero, climate resilient bank and aspiration to transition our lending portfolio to support the goals of the Paris Agreement.”

Westpac chief sustainability officer Fiona Wild said the “demand for energy and electricity and energy is increasing and at pace”.

“In the longer term, gas will play a decreasing role but it is still needed in the energy transition, as outlined in the government’s Future Gas Strategy and by the Australian Energy Market Operator,” Ms Wild said.

“Balancing the priority to decarbonise the economy with the need to maintain energy security and affordability will be critical in this transition.”

Last year major global investors, including New York City Pension Systems, Fidelity International and UBS, along with Australia’s three largest superannuation funds, Australian Super, Australian Retirement Trust and Aware Super, voted in favour of a similar resolution.

A record 34 per cent vote demanded Westpac disclose how its fossil fuel financing is aligned with global climate goals.

Shareholders have joined with Market Forces and Australian Ethical to also file a climate-related resolution at ANZ, which will hold its AGM on 18 December.

Originally published as Global investors back lobbyists’ resolution Westpac come clean over over fossil fuel finance