ANZ vows to step away from thermal coal

The bank’s new carbon policy has received a mixed reaction  

ANZ’s new climate policy will stop the bank from directly financing any new coal-fired power plants or thermal coal mines by 2030, but environmental groups say the plan does not go far enough.   

The bank has vowed to immediately stop accepting new business customers whose thermal coal exposures amount to more than 10 per cent of revenue, with ANZ promising to only directly finance gas and renewable power projects by 2030.

For existing customers with more than 50 per cent thermal coal exposure, ANZ will work with them to create diversification strategies away from coal by 2025.

ANZ also expects its 100 largest emitting customers in the energy, transport, buildings, food and beverage, and agricultural sectors to establish or strengthen their low carbon transition plans over the next year.

This pledge to move away from giving loans to customers without clear and public transition plans has been slammed by members of the federal government, who believe the policy is an attack on farmers.

Environmental groups meanwhile have criticised ANZ’s policy for being inadequate and inconsistent with the Paris Agreement. 

ANZ group executive Mark Whelan said on the bank’s blog, Bluenotes, that the changes to ANZ’s carbon policy were about supporting the transition to a net zero emissions economy by 2050.

He said ANZ has expanded its lending support to the renewable energy sector since 2015 and significantly reduced its exposures to thermal coal mining. 

“In the last five years, we have reduced our lending to thermal coal mining by almost 70 per cent and increased our direct lending to renewables by around 63 per cent,” Whelan said.

“This is a clear sign we are serious about making changes to our lending portfolio and seeing our commitments through.”

Environmental groups not convinced by plan

The Australian Conservation Foundation (ACF) praised ANZ for taking positive steps away from financing thermal coal, but criticised the bank for its slow withdrawal timeline and for continuing to back climate-heating gas projects.

ACF’s CEO Kelly O’Shanassy said ANZ’s new thermal coal rules should apply to all coal, oil and gas projects and companies.

“The bank will continue to financially support companies with more than 50 per cent thermal coal exposure, despite acknowledging that companies that make more than 10 per cent of their revenue from thermal coal are materially exposed,” O’Shanassy said.

“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.

“We urge ANZ to strengthen the commitments in its new policy by ruling out all thermal coal, gas and oil investments by 2030, not investing in new or expansionary oil and gas projects, and divesting from these fuels in line with the Paris climate agreement.”

Activist group Market Forces has also criticised the plan.

Research coordinator Jack Bertolus said the new policy was underwhelming.

“It barely even brings ANZ into line with announcements made by the other big four banks on thermal coal, and gives highly polluting companies another five-year free pass to continue with business as usual,” Bertolus said.

“This is a case of rewarding failure.”

Federal government ministers slam ANZ ‘virtue signalling’

Members of the Morrison government – in particular National Party MPs – have attacked ANZ over its new climate policy.

Deputy Prime Minister Michael McCormack labelled the plan “sheer virtue-signalling”, arguing that tying agriculture loans with climate change ­action will hurt farmers.

Agriculture Minister David Littleproud urged regional Australians to consider steering clear from banks that “impose crippling new carbon targets and penalties” on Australian farming families.

“Banks are not and should not try to become society’s moral compass and arbiter – the Australian people decide that by who they elect,” Littleproud said.

“We can’t let unelected, profit-driven financiers from Pitt Street dictate to society how to produce food and fibre or how we run our economy.”

But ANZ has defended the policy, and denied it will be shifting support away from farmers. 

CEO Shayne Elliott said ANZ’s new measures focused only on supporting large institutional customers across all sectors to transition to a low carbon model. 

He said the policy was about helping ANZ’s major agribusiness customers run more energy and capital efficient operations, not about family farms.

“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,” Elliott said.

“We remain firmly committed to supporting Australia’s farmers and producers, now and into the future.”