Senior ministers in Australia’s federal Coalition government have taken the extraordinary step of urging a boycott of ANZ, one of the country’s big four banks, after it released an updated climate change statement that outlined plans to prepare for zero net emissions and to dial them in to its lending policies.
The update from the ANZ Bank included a new commitment to follow other major financial institutions to immediately stop the funding new coal mines or coal power stations, as well as working to phase-out its existing coal investments by 2030.
ANZ also said that it would only look to provide finance to new renewable energy projects and low carbon gas projects, with the aim of reducing the carbon intensity of its lending exposures.
It would also work with its 100 largest customers in sectors including energy, transport, buildings and food, beverage and agriculture’ to ensure they had sufficient zero emissions transition plans in place, as it aims to reduce the emissions footprint the sectors it had provided finance.
ANZ said that it would “move away from working with customers that do not have clear and public transition plans”, which attracted the ire of some within the Morrison government who sought to bring the bank into line after appearing to suggest it would withdraw from high emissions industries.
The move by ANZ brings it in line with major rivals Westpac and the Commonwealth Bank, and was described as a “baby step” by environmentalists. But it attracted a rapid rebuke from the Coalition government, with three federal ministers issuing statements suggesting boycotts and threatening direct interventions in an attempt to scare the bank out of its new climate change position.
This included federal minister for agriculture David Littleproud who threatened interventions from the Coalition government, as well as effectively calling for a boycott of banks that consider the impacts of climate change in their lending decisions.
“Regional Australians should reconsider using banks that impose crippling new carbon targets and penalties on Australian farming families and industries,” Littleproud said.
“The Nationals will review every policy leaver a the federal government’s disposal – including the availability of deposit guarantees – to protect Australian farmers from these sorts of arbitrary boardroom ideological agendas,” Littleproud added.
Deputy prime minister and Nationals leader Michael McCormack labelled ANZ’s decision as ‘virtue-signalling’, while federal resources minister Keith Pitt also suggesting a boycott of the bank, encouraging “Australians, particularly those in the regions who feel let down by ANZ’s decision, to look around for a better deal.”
The calls for boycotts seem to put the ministers at odds with prime minister Scott Morrison, who has previously said the Coalition was considering ways to prevent environmental groups calling for their own boycotts on companies that continued to invest in the fossil fuel sector.
It also puts the ministers at odds with farmers groups, including the National Farmers Federation, which have themselves adopted positions in support of net zero emissions targets. In August, members of the National Farmers Federation voted in to adopt a position in support of an economy-wide target of net carbon zero by 2050.
Following the frenzied response, ANZ’s Chief Executive Officer Shayne Elliot issued a statement which suggested the Coalition ministers had misinterpreted the changes that had been made to its climate policies, stressing that they only applied to the largest greenhouse gas emitters and would not impact the way the bank dealt with individual farmers.
“You may have also seen some media coverage today suggesting that as part of our updated carbon policy, we will be shifting support away from our farmers,” Elliott said. “I want to assure you that this is absolutely not the case.”
“ANZ’s climate change statement is focused on the top 100 carbon emitters, and will have no impact on the bank’s farmgate lending practices.”
The updated climate change statement was issued as ANZ sought to align its business with the Paris Agreement, including a goal to achieve net zero emissions by 2050, a goal that has been adopted by every Australian state and territory, as well as a rapidly growing number of Australia’s largest trading partners.
Despite the response from the Coalition ministers, ANZ’s updated statement received a lukewarm response from environmental groups, which considered the bank’s new climate statement as only a “baby step”, and that more substantial commitments were necessary in its response to climate change.
“We welcome ANZ’s commitment to stop direct lending to coal-fired power stations and thermal coal mines by 2030 and to not directly finance new or expansionary thermal coal projects,” the Australian Conservation Foundation’s CEO Kelly O’Shanassy said.
“Yet ANZ remains firmly invested in companies that it acknowledges have material exposures to thermal coal. The bank will continue to financially support companies with more than 50% thermal coal exposure, despite acknowledging that companies that make more than 10% of their revenue from thermal coal are materially exposed.”
“While ANZ will encourage those customers to diversify and broaden their assets, it has refused to set a firm exit date for its investments in thermal coal companies. ANZ has not explained how these policies will affect its financed emissions and their climate impact,” O’Shanassy added.
National Australia Bank now remains the sole member of the ‘big four’ Australian banks that still maintains a policy providing finance to new coal projects.