If a bank’s climate change policy supports the Paris goal of holding global warming well below two degrees, and recognises it has a role to play in helping achieve that goal, would you then expect that bank to avoid loans to new projects expanding the fossil fuel industry?
If so, you’d be in the majority.
According to new polling commissioned by Market Forces, two thirds of bank customers hold that expectation, about five times as many as those who disagree. And fair enough.
While we can argue all day about targets and timeframes for getting off fossil fuels, surely an obvious step would be to stop issuing loans that expand the sector and just make things worse.
Yet that is precisely what is happening.
As we revealed in RenewEconomy last week, since the big four banks all got behind the Paris goal they have made loans to new fossil fuel projects capable of releasing another 3 billion tonnes of CO22 into our atmosphere.
With the Stockholm Environment Institute report coming out last week, we learned that this amount of CO22 equates to Australia’s remaining carbon budget for a 1.5°C global warming scenario, and a third of Australia’s 2°C budget.
What might explain this gulf between commitment and reality? If we’re being generous we could suggest a lag between commitments being made and their implementation.
But really? For Commonwealth Bank to get behind the two degree goal last October and then in February finance what was described by its owners as “one of the largest oil discoveries ever made on the Norwegian continental shelf” to “prolong the life of the Norwegian oil industry for several decades” is a bit of a stretch.
Australians want and expect climate change action from their bank. The polling actually found that 74% of Australians think their bank should be avoiding projects and companies that harm the environment and make climate change worse. But less than 20% of us actually can say that of our bank.
Nearly half of Australians would be prepared to switch to another bank if they found out their current bank is financing projects that worsen climate change, were coal or gas projects in the Great Barrier Reef, or were coal seam gas projects near agricultural communities.
The strength of public opinion around financing of fossil fuels has already been shown in the growing momentum in the divestment movement. In only the last fortnight, Sydney City Council passed a motion calling for a policy that would remove more than $500m from banks that invest in fossil fuels, adding to around 580 institutions, controlling assets worth about US$3.4 trillion, which have already divested.
The banks are slowly realising the opportunities of renewable energy investment, but this latest polling should be a wake up call that Australians expect for more than a climate IOU, and are increasingly willing to take their money elsewhere if the banks’ promises turn out to be empty.
Julien Vincent, Executive Director Market Forces