Climate Banking Report

8/8/2019 Climate Banking Report

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www.greenpeace.org.au


2/81 Pillars of Pollution

Australia has some of the most abundant sources ofclean energy in the world. With the right investment andsupportive policies, we could quickly become a clean energy

powerhouse, creating jobs and boosting the economy whilecleaning up our environment.

Unfortunately, the big four banks are pouring money

your savings into the most polluting form of power: coal.

Burning coal is the single biggest contributor to globalwarming. Global warming threatens the safety of our planet,our health and our future.

The rst step to a clean energy future is

to stop building new coal power stations.

In Australia, the big four retail banks, ANZ, National,Commonwealth and Westpac, are the biggest providersof nance to the coal industry.i They invest billions of dollarsin coal mining, coal power stations and coal exports,while promoting an image of community responsibilityand environmental sustainability. Financing the coal industryis fuelling pollution and making global warming worse.The impacts of climate change are being felt throughoutAustralia and the Pacic region, home to the bankscustomers. Australia needs to undergo a clean energyrevolution, and the big banks have a vital role to play.

To become responsible corporate citizens, ANZ, National,

Commonwealth and Westpac need to stop nancing

polluting coal projects and instead shift investment

to renewable energy. The banks have the power to help usachieve the vision of making clean energy bigger and cheaperthrough nancing large-scale solar, geothermal, wind, oceanand other clean energy technologies.

Instead, the banks are focusing their efforts on attemptingto look green, ignoring the huge environmental impactscaused by the coal projects they nance.

Australias banks must stop pouring

our money into polluting coal power

and redirect it to pollution-free, cleanenergy solutions.

Our cOal DepenDence

With everything we know about global warming and the cleanenergy technologies available, you would think that coal wouldbe on the way out. Shamefully, the exact opposite is true.A lack of political courage by state and federal governmentsin Australia has meant the expansion of the coal industryhas continued unchecked.

There are plans on the books for twelve new dirty coalpower stations around Australia. If built, they would increaseAustralias total emissions by 7 per cent.

Australia is already one of the worst carbon polluters

per person in the world and its because most of our

electricity comes from coal power stations. Our powerstations are among the worlds dirtiest, with only eightcountries having more pollution-intensive electricitythan we do.ii

While Australia becomesmore dependent on coalwe are endangering our

health, polluting the airand dirtying the water.We are also hamperingAustralias economiccompetitiveness as othercountries move aheadin the clean energy race.

The DirTy DOzen - new cOal pOwer sTaTiOns prOpOseD fOr ausTralia

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rphy


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Greenpeace/Hunt

Greenpeace/Murphy

Our addiction to coal is not a cheap habit. Digging upand burning this energy source is an expensive operation.It can cost several billion dollars to build a new coal powerstation more than most energy companies can raiseon their own. This is where the big banks come in.

ANZ, National, Commonwealth and Westpac Australias

largest retail banks are also the biggest providers

of nance to the coal industry.iiiBanks lend most of thecost of building a new power station. About three quartersof the costs will usually be nanced from a large consortiumof banks providing a syndicated loan. For large projects,up to twenty different banks can be involved but thereis always at least one bank acting as lead arranger

or bookrunner to pull the whole deal together.Energy companies must also nd equity investorsto fund up to one quarter of the project.

The role of the big four banks is crucial for the nancing of coalpower stations in Australia. If ANZ, National, Commonwealthand Westpac all refused to nance new coal, it wouldsignicantly increase the risk and cost of these projects.International banks would also be less likely to get involved,making it more difcult, more expensive and less likely that

coal power stations are built.

Ifyoubankwithone ofthe big four,yourmoneyisbeingusedtonance theexpansion ofthe pollutingcoal industry,making global warmingworse.

DirTy mOney



spinning susTainabiliTy

Greenpeace commissioned a specialist nance researchgroup, Profundo, to determine who has been the biggestnancier of coal in Australia over the last ve years.

The results have conrmed that all four big banks

are heavily invested in the coal industry.

financing pOlluTiOn - The breakDOwn

Finance of Coal Power Stations

Finance of Coal Mining

Finance of Coal Ports

Despite their large-scale investment in polluting power,

the big four banks all make concerted efforts to paint

a different public image.

Almost all of the big banks promote their policies to gocarbon neutral or to reduce the greenhouse footprint of theiroperations. What theyre more reluctant to highlight is the partof their business that has by far the biggest environmentalimpact their lending practices. There is little point installingefcient light bulbs while continuing to nance the expansionof the coal industry.

Major banks such as ANZ and Westpac have happilyaccepted sustainability awards while continuing toinvest hundreds of millions of dollars into polluting coalpower stations.

Despite their green rhetoric,none of the banks have ruledout nancing new pollutingcoal power stations, makingtheir continued greenwash

a triumph of spin oversubstance.

Total Coal Finance

coal power stations coal ports coal mining

ANZ Australia and New Zealand Banking Group Limited

CBA Commonwealth Bank of Australia (including Bankwest)

WBC Westpac Banking Corporation (including St. George)

ANZ is the biggest nancier of coal

power stations and coal mines,

while Commonwealth is the biggestnancier of coal export ports.

NAB National Australia Bank Limited

BEN Bendigo and Adelaide Bank Limited

MECU mecu Limited

lasT5years

lasT5years

lasT5years

lasT5years

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BANK SPIN SUBSTANCE

ANZ Policy & public statements: In May 2007, ANZ announced our objective to become

carbon neutral in Australia and New Zealand by the endof 2009. iv

ANZ has committed to fund only new projects that canbe developed and operated according to sound socialand environmental standards. v

Awards:

Dow Jones Sustainability Index ANZ assessed as No.1bank globally on corporate sustainability performance.

Carbon Disclosure Project Leadership Index.

Invested $650 million in polluting coal powerstations in Australia in the last 5 years.

Invested $727 million in coal mining in Australiain the last 5 years.

A lead arranger of nance for Bluewaters II,the most recent coal power station builtin Australia.

CBAPolicy & public statements: We recognise that our organisation has both a direct

and indirect impact on the environment and believe thatmanaging these impacts is an important aspect of soundbusiness management. vi

We aim to build a sustainable future and contributeto a better environment for all Australians. vii

Invested $535 million in polluting coal powerstations in Australia in the last 5 years.

Invested $402 million in coal mining in Australiain the last 5 years.

Invested $440 million in coal ports in Australiain the last 5 years.

Owns a 2 per cent equity share in Hazelwood one of Australias dirtiest power station.

NAB Policy & public statements:

We are committed to making a contribution to thesustainability of our planet by reducing both our directand indirect environmental impacts.

We are leading by example to reduce our carbonfootprint and make our operations carbon neutralby September 2010. viii

Awards:

Listed on the Dow Jones Sustainability Index.

Climate Disclosure Project Global Leadership Index.

Invested $382 million dollars in polluting coalpower stations in Australia in the last 5 years.

Invested $633 million dollars in coal miningin Australia in the last 5 years.

A lead arranger for nance of Bluewaters II,the most recent new coal power station.

NABs investment arm, National Nominees Ltd,is the largest shareholder in Aviva Corporation.Avivas projects include the proposed newCoolimba coal power station in WA.

Westpac Policy & public statements:

Westpac is committed to responsibly managing bothour direct and indirect environmental impacts. ix

We factor environmental considerations into ourinvestment and lending decisions and adhere to the

Equator Principles in managing environmental and socialrisk in project nance. x

Awards:

Ranked as one of worlds most ethical companiesby Ethisphere.

Gold award for Climate Leadership Money MagazinesBest of the Best awards.

Invested $454 million in polluting coal powerstations in Australia in the last ve years.

Invested $354 million in coal mining in Australiain the last ve years.

Invested $220 million into coal ports in Australia

in the last ve years. Co-manager of nance of Bluewaters II,

the most recent new coal power station builtin Australia.

spin Or subsTance?

Greenpeace/Prat ten/Arnold Greenpeace/Alcock



hOw can banks be parT Of The sOluTiOn?

We have a choice about the kind of world we live in

today and what kind of world we leave for our childrentomorrow. Greenpeace has laid out a vision for anAustralian Energy [R]evolution xi showing how our societyand economy can be powered by renewable energy.Modelling commissioned by Greenpeace has revealed that it istechnically and physically possible for all of Australias pollutingcoal power stations to be replaced with a combination ofseven renewable energy technologies and energy efciencymeasures over the next decade.

Last year, for the rst time, more money was invested globallyin renewable energy than in fossil fuels. Wind, solar and other

clean technologies attracted US $140 billion compared

with US$110 billion for gas and coal powerxii

. This trendlooks set to continue and is an important signal that anenergy revolution is underway. However, despite the positivedevelopments, the transition is not happening quickly enoughto avert a climate catastrophe.

According to the Profundo research, over the last ve yearsAustralias big banks have invested over $5 billion into mining,transporting and burning coal and only $0.78 billion intorenewable energy.

Renewable Energy vs Total Coal Investments

total coal investments renewable energy

lasT5years

InAustralia,whilethebigfourbanksallpro

videnanceforrenewableenergyprojects,thevastmajorityoftheirinvestmentsareincoal.

Greenpeace/Murphy

Greenpeace/Langrock


7/8Pillars of Pollution 6

Methodology

Trying to nd out which banks have invested in which coalprojects is a bit like trying to nd needles in a haystack.

The information is often classied as commercial-in-condenceand the banks all disclose investment information in verydifferent ways. Greenpeace commissioned Profundo,an economic research consultancy based in Amsterdam,to conduct the research.

We decided to look at the last ve years of investment incoal and renewables rather than the banks total investmentsin these sectors, on the basis that the last ve years wouldgive a more accurate picture of the banks current investmentstrategy than total historical investments.

The investments were identied by using annual reports,stock exchange lings and other publications, company

register lings, archives of international nancial journals,international press archives, archives of national presspublications as well as specialised nancial databases.

Comprehensive information was not consistently availableso a number of assumptions and extrapolations were made,using a similar methodology to that used by the banks

themselves. Full details on our methodology is availablein the Profundo report online here:www.greenpeace.org.au/dirtybanks/profundo

Referencesi Profundo, 2010, Australian banks nancing coal and renewable energyii http://www.garnautreview.org.au/pdf/Garnaut_Chapter7.pdf page 160iii Profundo, 2010, Australian banks nancing coal and renewable energyiv http://www.anz.com.au/about-us/corporate-responsibility/environment/

environmental-footprint/carbon/ accessed 7.9.10v http://www.anz.com/aus/values/environment/Equator.asp accessed 7.9.10vi http://www.commbank.com.au/about-us/our-company/sustainability/

environment.aspx accessed 7.9.10vii http://www.commbank.com.au/about-us/our-company/sustainability/

accessed 7.9.10viii http://www.nab.com.au/wps/wcm/connect/nab/nab/home/about_us/7/4/2/2

accessed 7.9.10

ix http://www.westpac.com.au/about-westpac/sustainability-and-community/environment/ accessed 7.9.10

x http://ww2.westpac.com.au/about-westpac/sustainability-and-community/environment/policy-and-governance/ accessed 7.9.10

xi http://www.greenpeace.org.au/energyrevolutionxii http://www.guardian.co.uk/environment/2009/jun/03/renewables-energy

accessed 7.9.10

While all the banks have a credit policy to guide theirinvestments, at the time of writing none of the big four bankshave a clear public policy that would stop them investingin new coal power stations. Yet socially responsible policiesare not new for banks. Some have policies to not invest incompanies that make cluster bombs; others refuse to investin brothels, or in nuclear power stations. In 2008, the bigfour Australian banks all agreed to not provide nanceto the controversial Gunns Pulp Mill in Tasmania.

whaTyOucanDO

-TurnThispage

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Greenpeace/Redondo

Greenpeace/Rezac

Forrealprogress,endinginvestment

innewcoalpowerisvital.

We need the big four banks to stand with the Australiancommunity and make a clear decision to not nance new

coal power stations. And we need them to do it now.With twelve new coal power stations on the drawing boardaround Australia, and with governments unwilling to standup to the big polluters, banks have a vital role to play in drivingthe clean energy revolution we so urgently need.


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Your money should go where you want it to: creating a betterfuture with clean energy, not funding polluting coal power.

Banks spend millions of dollars each year to improve theirreputation, keep existing customers and attract new ones when we ask for change, theyll be listening.

1. Let your bank know that you dont want your money

used to invest in more pollution.

ANZ

1800 805 154

Complete the online feedback form:http://bit.ly/DirtyANZ

Locked Bag 4050, South Melbourne VIC 3205

Commonwealth Bank

1800 805 605

Complete the online feedback form:http://bit.ly/DirtyCBA

Customer Relations, GPO Box 41,Sydney NSW 2001

National Australia Bank

1800 152 015

Complete the online feedback form:http://bit.ly/DirtyNAB

Head of Customer Resolutions,Reply Paid 2870, Melbourne VIC 8060

Westpac

1300 130 467

Complete the online feedback form:http://bit.ly/DirtyWestpac

Reply Paid 5265, Sydney NSW 2001

2. Drop into a local bank branch and ask to speak

to the manager about their coal investments.

You can take a copy of this report.

3. Become a Greenpeace Community Activist

or join a local Climate Action Group to join others

in your community taking action for a clean energy

future at bank branches across the country.www.greenpeace.org.au/take-action

4. Credit unions and cooperative banks

Credit unions and cooperative banks offer competitiveservices to the big banks but most dont invest in pollutingcoal. Our research showed that both Bendigo Bank andmecu Credit Union had no money in coal. Unfortunately,they also have no money invested in renewables.

Credit unions are not-for-prot and every customer is anowner. The incentive is to make your money work for youand your community, not prot from dirty investments.The Australian Credit Union and Building Society Group

(www.comesbacktoyou.com.au) represents more than80 organisations and 4.5 million members.

Greenpeace Australia Pacic

GPO Box 3307, Sydney NSW 2001

L 2, 33 Mountain Street, Ultimo NSW 2007

Ph: +61 2 9281 6100

Fax: +61 2 9280 0380

Email: [email protected]

www.greenpeace.org.au

whaT yOu can DO

Greenpeace/Redondo

Greenpeace/Hunt

Greenpeace/Redond

o

Greenpeace/Sewell/Oculi

Report pdated Febr ar 2011 Co er Image Greenpeace/M rph

Join Greenpeace. We do not accept funding fromgovernments or corporations; instead we rely on the goodwilland generosity of people like you to continue our work.Call 1800 815 151 or visit www.greenpeace.org.au/join

Yourmoneyshouldgowhereyouwantitto:

creatingabetterfuturewithcheap,readilyavailable

cleanenergy,notfundingpollutingcoalpower.

Climate Banking Report

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