Australia’s major banks provide ‘backdoor finance’ to fossil fuels: NGO — Most of the US$2.43 billion in loans fall under general-purpose corporate lending and bonds, which are harder to track than direct project loans

1 comment

1. *Australia’s four largest banks have drawn criticism for their sustained financing of fossil fuels, which amounted to a loan value of AU$3.6 billion (US$2.43 billion) in 2023. Nearly 70 per cent of these funds were funnelled to companies that are expanding the coal, oil and gas industries.*

   *The findings were published by the environmental group Market Forces, which has called out the banks for “completely undermining their climate credentials” with these loans.**

   *Over AU$61 billion (US$41.1 billion) has been loaned to fossil fuel companies since the Paris Agreement in 2015, though all four financial institutions have committed to limiting global warming to 1.5°C and reaching net zero emissions by 2050.*

   *“The big four banks are engaged in a monumental façade, as long as they continue undermining a safe climate by funnelling billions to companies steaming ahead with more coal, oil and gas,” said Kyle Robertson, senior banks analyst at Market Forces and author of the report.*

    

   *Some of the deals partially funded by Australia’s largest banks include the Japanese JERA Global Markets’ liquefied natural gas (LNG) business. In October 2023, ANZ loaned AU$125 million (US$84.2 million), while Westpac loaned AU$101 million (US$68 million) as part of a larger credit deal to the energy trader, which specialises in LNG, coal and freight.*

   *Additionally, JERA has been identified as a major player in the Japan-led fossil gas expansion in Asia and is involved in the massive fossil fuel buildout plans in Bangladesh’s Chattogram region, which is home to the country’s last rainforest.*

   *These projects will release 1.3 billion tonnes of carbon dioxide equivalent (CO2e) if completed, cancelling out any gains made under Japan’s 2030 emissions reduction targets more than two times over, according to analysis by Fossil Free Chattogram, an initiative under Market Forces.*

   *Fossil fuels continue to form the bulk of the energy mix in Asia Pacific, with thermal coal remaining one of the most profitable commodities to trade despite sub-optimal bank funding and increasingly reputational and stranded asset risk.*
   ___

   *https://www.marketforces.org.au/wp-content/uploads/2024/07/Banking-Climate-Failure-2024-report.pdf