Commonwealth, NAB and ANZ are each analysing the financial position of business customers in sectors exposed to climate change
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| Of Australia's 'big four' banks – Commonwealth, NAB, ANZ and Westpac– only the latter is not currently reviewing its exposure to fossil fuels. Photograph: Bloomberg/Getty Images |
The Commonwealth Bank is conducting a "detailed climate policy review" that will be released publicly pending board approval, and NAB has a working group reviewing the risks from global temperatures rising two degrees.
ANZ is conducting portfolio analysis to identify changes in the financial position of business customers in sectors "most exposed" to climate change. It is also working with the Bureau of Meteorology to understand variability in average annual rainfall over recent decades to understand how climate change is affecting Australia's traditional farming areas.
Executives from the three banks shared this information with the House of Representatives' standing committee on economics, as part of a review of the four major banks. The revelations, written in response to questions on notice from the committee, were published on the federal parliamentary website on Friday afternoon.
It comes two months after the banking regulator warned climate change posed a material risk to Australia's financial system, and urged companies to start adapting.
Geoff Summerhayes from the Australian Prudential Regulation Authority (Apra), in a major speech to the Insurance Council of Australia's annual forum in February, warned it planned to start running stress tests of the financial system to see if it would survive various adverse climate shocks.
He pointed to the Paris Climate Agreement, ratified by Australia in November, as a significant policy moment for all governments, including Australia's.
Summerhayes said the Paris Agreement provided an "unmistakable signal" about the future direction of policy and adjustments that companies, markets and economies "will need to make".
The revelations from CBA and NAB come after ANZ's chief executive, Shayne Elliott, said last month he was examining the impact of sea level rise and other climate impacts on housing mortgage risk.
Adam Bandt, the Greens' climate and energy spokesman, has welcomed the revelations. He also questioned why Westpac has not ruled out funding Adani's giant Carmichael coalmine in Queensland given its competitors' concerns about climate change.
"Following ANZ's revelation that sea-level rises might make it tougher to grant a mortgage, CBA and NAB seem to be examining whether to follow suit," Bandt said. "The penny doesn't seem to have fully dropped, because banks like Westpac still think they can commit to a two degree target but leave the door open to expanding coal mines.
"Westpac's refusal to rule out funding Adani is especially concerning; as the bank seems to think it can have its climate cake and eat it too. But the days of dealing with climate change simply by putting a polar bear in your ad are long gone."
Last year, financial activists Market Forces said Australia's big four banks could act on their stated ambition to help achieve a 2C warming target simply by giving no new loans to coal projects.
Links
- Apra says companies must factor climate risks into business outlook
- Turnbull signals Australia won't follow Trump's lead on Paris climate agreement
- Big Australian banks invest $7bn more in fossil fuels than renewables, says report
- Australian banks review exposure to fossil fuels
- No private appetite for coal, experts say
- Turnbull bid for clean coal hits hurdle
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