Australia’s big four banks caught napping on methane emissions, and still supporting coal

Australia’s big four banks are being urged to take greater action against climate change after a study found none were specifically identifying emissions of a major greenhouse gas.

The banks’ failure to single out methane emissions could undermine their environmental efforts, the study warned, in addition to their failure to phase out support for methane-intensive coal-mining projects.

The Institute for Energy Economics and Financial Analysis issued the warning and six recommendations on Thursday after analysing climate reports from the Commonwealth Bank, ANZ, Westpac and NAB.

The report comes after Australian research group The Superpower Institute launched an open platform to report methane emissions and after the big big banks were found to have cut lending to fossil fuel companies by more than 20 per cent in two years.

The institute’s report analysed annual climate reports and climate transition plans from the four banks and found only ANZ covered methane emissions in its environmental reporting, and none recorded methane emissions separately.

The lack of methane reporting went against Partnership for Carbon Accounting Financials guidelines, report author and lead coal analyst Anne Knight said, and could diminish the banks’ environmental targets.

“Australia’s major banks have taken significant strides in addressing their climate-related financial risks and setting decarbonisation targets,” she said.

“However, the credibility and effectiveness of these efforts are undermined by various critical shortcomings, most notably the inconsistent, often inadequate treatment of methane emissions.”

While all four banks had set targets to phase out financing for thermal coal mining projects by 2030, they did not set similar targets for metallurgical coal mining that used more methane on average.

NAB and Westpac had banned support for new metallurgical mining projects this year, but Ms Knight said they had an opportunity to make a bigger climate impact by addressing methane use.

“Reducing methane emissions now could have more immediate results at slowing down global warming,” she said.

“Banks could be doing more to help achieve this.”

The institute issued six recommendations to banks in the report including explicitly reporting methane emissions, requiring independent verification of methane emissions from clients, and phasing out finance offered to both thermal and metallurgical coal projects.

The report follows research from The Superpower Institute that warned Australia’s methane emissions from fossil fuel production could be twice as high as current estimates.

It also comes after a Macquarie analysis of the major banks’ environmental, social and governance plans in December found they had cut lending to fossil fuel businesses by more than 20 per cent in two years.

Source: AAP