Buried in details of $10 billion profit, CBA lifts bar on funding for fossil fuel projects
Australia’s biggest bank has vowed to cut its funding of fossil fuel projects in a major step for the economy’s energy transition.
Commonwealth Bank of Australia CEO Matt Comyn. (AAP Image/Joel Carrett)
Commonwealth Bank of Australia released its updated climate policy on Wednesday, which was largely welcomed by climate advocacy groups.
The bank has ruled out directly financing new and expanded oil and gas extraction projects and from 2025 will require fossil fuel clients to publish independently verified plans to cut emissions.
Financing key infrastructure, such as pipelines to new oil fields, will also be precluded.
Will van de Pol, acting CEO of activist group Market Forces, welcomed the commitment, which he says places CBA well above its banking peers.
“This policy sends a stark warning to the fossil fuel industry: funding for your climate-wrecking expansion plans is drying up faster than a puddle in a heatwave,” he said.
“ANZ, NAB, Westpac and Macquarie have been left embarrassingly behind on climate action, with CommBank’s new policy reinforcing its significant drop in lending to fossil fuels over the last two years.”
CBA reduced the emissions intensity of its portfolio by 23 per cent from 2020 to June 2022 and decreased lending exposures to oil and gas customers by 56 per cent since 2021.
But the bank’s failure to rule out financing new liquefied natural gas processing plants was a concerning gap in the policy, Mr van de Pol said.
“Just in our region, projects like Papua LNG and the Darwin LNG extension threaten to bring online massive new gas fields, adding emissions for decades to come.”
Climate Council economist Nicki Hutley’s overall report card read: “good, but could do much better”.
She took umbrage with the bank’s failure to ban financing new and expanded metallurgical coal mines if deemed in line with the Paris Agreement.
“We must be mindful of corporate greenwashing,” Ms Hutley said.
A spokesperson for CBA told AAP the bank assessed transactions on a range of factors and used sector-level targets to determine where to invest.
Jonathan Moylan, corporate campaigner at the Australian Conservation Foundation, said it was encouraging to see the bank disclosing its high-level assessment of nature-related risks.
“The next step for Commbank is to map and quantify its impacts and set targets to stop habitat destruction, over-exploitation and pollution,” he said.
ANZ, NAB, Westpac and Macquarie were contacted for comment.
