Fossil fuel fudge
Most of the big four banks will actually be financing more CO2 emissions in 2030 than they do today courtesy of loopholes in their fossil fuel exclusion policies.
The four major Australian banks have had a lot to say on their plans to reduce their “financed emissions” — those generated by their customers’ oil and gas extraction projects.
Commonwealth Bank was the first to move, with a targeted 27% reduction for oil and 21% for gas in its 2030 financed emissions. NAB and Westpac quickly followed suit, with 22% and 23% targets respectively. That leaves ANZ as the outlier with no specific target — although the bank has said it has reduced its overall exposure to fossil fuel projects by 40% since 2015.
Interestingly, none of the banks are prepared to put a dollar figure on the amount of loans they expect will be outstanding to their fossil fuel customers by 2030, or indeed any other future point in time. When asked about this, they said they preferred to think in terms of the total emissions that are being generated as a result of their lending rather than the absolute amount.
This seems to make sense until you realise that if fossil fuel customers make their projects more energy efficient — let’s say they reduce some of the “fugitive emissions” associated with venting or flaring oil and gas wells — then theoretically the banks could end up lending more for projects that each have lower emissions on average.
