Australia’s big four banks have significantly increased investment to projects that will expand the fossil fuel industry as they claim to support efforts to limit global climate change, according to new research by the environmental finance group Market Forces.

The report shows the banks have effectively walked away from coal, after years of increased pressure from the environmental lobby and customers wanting to deal with sustainable companies. None of the big four banks has invested in new coal projects since 2015.

But a spike in finance for new oil and gas projects has, according to Market Forces’ head of research, Jack Bertolus, put a significant dent in those green credentials.

“It’s all well and good to commit to ‘two degrees’ [the Paris target to limit climate increases above pre-industrial levels] but you’ve got to back it up with action, and it’s plainly obvious that we can’t be expanding the size of the fossil fuel industry. That’s what the science says but it’s also common sense.”



Market Forces found that big bank lending to new fossil fuel projects increased by 50% in 2017, a total of $2.265bn up from $1.509bn the year before. ANZ topped the list, lending $905m, an increase of 93% from 2016, which included investment in gas fields in North Sumatra and in the Ichthys field off the northern Australian coast.



The report says ANZ, CommBank, Westpac and NAB banks have provided direct project finance for 17 new fossil fuel projects since making commitments to the Paris target.

“Over their lifetimes, these projects are expected to enable 4.9bn tonnes of CO2, enough to cancel out Australia’s emissions reduction target more than five times over,” the report says.

Bertolus said banks had clearly realised that investment in coal was not worth the damage to their reputation. But he said it was hypocritical to get public relations mileage on one hand, and on the other continue to fund oil and gas projects.



“In a sense it doesn’t matter if you’re funding coal or oil and gas – if it’s inconsistent with two degrees it’s essentially a race to the precipice,” he said.

The report is particularly critical of ANZ and CommBank’s funding for fossil fuels. NAB is the best of the big four, putting considerably less into fossil fuels but still more than on renewable energy projects.

“There are plenty of choices outside of the big four that don’t fund fossil fuels at all, and in some cases have active policies about not funding the fossil fuel industry,” Bertolus said.



ANZ has publicly stated it supports the goal of attempting to limit climate increase to 2C above pre-industrial levels. “ANZ as a responsible and sustainable business is playing its part to support the transition to a decarbonised economy,” it has said.

A spokesperson for the Commonwealth said the bank’s coal funding had been “trending down for some time” and was relatively small. The bank described gas as “a transition fuel”.

“We expect that trend to continue over time as we help finance the transition to a low carbon economy.

“CBA has been supporting the shift in the Australian economy towards low carbon energy alternatives, with a significant movement from coal towards renewable energy, and gas as a transition fuel.”