CommBank to walk away from fossil fuel companies without genuine emissions plan   :)
One of Australia’s biggest banks has revealed a big change in how it handles fossil fuel companies in a bid to tackle climate change.


News.com.au
August 17, 2024

Commonwealth Bank has announced it will walk away from fossil fuel companies without genuine plans to achieve the Paris Agreement on climate change, days after it posted close to $10 billion in full-year net profit.

The banking giant announced in 2023 it would require existing oil and gas clients to implement a “transition plan” by next year in order to reach the landmark agreement’s goal of a less than 2C rise in temperatures.

According to its most recent climate report released on Thursday, CommBank revealed it was already in talks with clients whose plan did not meet criteria or who had not provided one before their January 1 exit.

Analysis by Market Forces found the big four bank had already dropped $700 million in lending expenditure in the past year to oil and gas clients and had already halved upstream oil and gas lending since 2022.

Market Forces said CommBank, once a “climate langured” and “enabler of climate destruction”, had already begun applying its new climate policy and now had the lowest lending of the big four to fossil fuel companies.


The bank said the plans would be independently assessed and had to included disclosure of investments in decarbonisation, with the aim under the Paris Agreement of halting the worst effects of climate change.

“Climate change is a collective global challenge requiring co-ordinated action to limit global warming to 1.5C,” Commonwealth Bank Paul O’Malley and Chief Executive Officers Matt Comyn stated in the report.

“While there will continue to be stakeholder interest in any fossil fuel-related activities, as Australia’s largest bank, we remain focused on a secure energy platform … and to evolve alongside Australia’s energy transition.”

Climate activists have for years been ramping up pressure on banks to divest from fossil fuels, with ANZ, NAB, and Westpac either reducing lending to fossil fuel companies or supporting transition plan schemes.

It comes after Commonwealth Bank on Thursday posted a $9.48 billion statutory full-year net profit after tax for 2023-24, down six per cent from the record earnings posted by the big four bank just last year.

Why is it targeting oil and gas, but not coal?

What targets are there for individual companies under the Paris agreement?

Commonwealth Bank stops lending to fossil fuel companies without genuine emissions plan
ABC News
August 17 2024

The Commonwealth Bank has made a major leap in its climate policy, blacklisting fossil fuel companies without genuine emissions plans from its client list.   :)




In short:Australia's largest mortgage lender is no longer offering money to fossil fuel companies that are not aligned with the Paris Agreement.
The bank announced the new direction in its latest climate report, published on the same day it posted close to $10 billion in full-year net profit.

What's next?The spotlight is now on the other big banks with a finance deal of about $750 million for oil and gas giant Santos on the table.
The Commonwealth Bank of Australia (CBA), the country's largest mortgage lender, is the first major Australian bank to start walking away from funding fossil fuel companies without genuine emissions plans.

In its latest climate report, released on the same day it posted close to $10 billion in full-year net profit, the bank stated that it had already been ditching clients not aligned with the Paris Agreement.

The real-world effects of the bank's new policy could be put to the test as soon as next week, with a major gas loan reportedly being signed off without CBA at the table.

Last year, the bank announced from 2025 it would not provide loans to any coal, oil, or gas companies that did not have a transition plan in line with the Paris goals to avoid dangerous warming. This week's report shows that it is applying that policy early.   :)

The silhouette of a smoking gas plant is contrasted against a golden sunset.
Companies' emissions transition plans will be scrutinised by an independent assessor to loan money from CBA.
CBA's loans to fossil fuels decreased by 92 per cent from 2018 to 2022, from $4 billion to $267 million, according to analysis from Market Forces, a group that campaigns against investments in environmentally destructive projects.

The bank also halved its exposure to oil and gas companies in the past two years from $3.3 billion in 2022 down to $1.7 billion.

Exposure represents the money the bank is set to lose if the investment fails.

The bank's new lending rules are a major win for the climate movement and groups such as Market Forces, which have targeted the bankrollers of fossil fuels for years.

"This announcement is massive for the domestic banking sector," Morgan Pickett, a bank analyst at Market Forces, said.

"CommBank is the biggest bank in Australia.

"They're the biggest company on the ASX [Australian Stock Exchange].

"For them to say we're not banking companies that aren't compatible with a safe climate, this will be a really big signal to the rest of the market, not just the banks."

Court cases, policies, protests, and shareholder climate activism have been ratcheting up the pressure on banks for years.

If a bank commits to the Paris Agreement, but keeps investing in fossil fuels, it exposes itself to legal action.