Australian Ethical Investment urges Westpac to restore Paris climate goals
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The news: Australian Ethical Investment (AE) will urge Westpac to restore its commitment to Paris-aligned climate lending standards at its AGM this morning, after the bank weakened its approach to assessing oil and gas clients’ transition plans.
The context: The Investment firm argues that the bank’s reversal risks enabling unsustainable fossil fuel expansion and undermines investor pressure for stronger climate action.
While Westpac previously committed to only provide new or renewed corporate lending to oil and gas companies with credible transition plans aligned with the Paris Agreement including scope 1, 2, and 3 emissions, the bank has since weakened its pledges, AE said in a press release.
AE states that Westpac dropped its requirement for Scope 3 targets, loosened its climate stance to bring its global warming target from 1.5C to “well below 2C”, and rated 91% of its oil and gas customers as having acceptable transition plans, despite continued fossil fuel expansion.
What they said: "Westpac is no longer the climate frontrunner among the big four banks. This year’s reporting suite shows that it has now slipped behind Commonwealth and National Australia Bank by stepping back from its own climate promises,” ethical stewardship lead, Australian Ethical, Amanda Richman, said in the release.
“Westpac’s new ‘customer transition action plan’ includes requirements around scope 3 emissions, but the bank has said it isn’t a guard rail that’s applied in practice."
“In short this means an oil and gas company now need only have scope 1 and 2 emission reduction targets to receive new or renewed financing from Westpac. This is inconsistent with Westpac’s original commitment,” Richman said.
The numbers: Australian Ethical has over $14 billion in funds under management across managed funds and superannuation.
The source: Australian Ethical press release
