The ANZ Bank has launched a new climate change policy and net zero emissions commitment by 2050, reiterating that the bank will move away from financing new thermal coal projects.
Key amongst the headlines of the new ANZ climate and net zero emissions policy is the transition from financing new coal-fired power plants and thermal coal mines in the next decade, with the aim to have zero coal projects on its books by 2030.
By 2030, ANZ says it will only lend money to the renewable energy sector or gas powered electricity generators, stating that by the end of the decade the bank would have “exited all direct lending to coal-fired power generation and thermal coal mines.”
The bank is aiming to have its operations “100% powered by renewable electricity,” and modify its buildings to “low or net zero carbon buildings,” by 2025.
ANZ also says that a key part of this promise will be no more than a 10% exposure of its new business customer’s portfolios to thermal coal, and will demand “specific, time-bound and public diversification strategies” from some of its largest customers that have more than a 50% exposure to thermal coal projects.
ANZ has released a statement saying that “over time, we will move away from working with customers that do not have clear and public transition plans,” adding that in order to meet its net-zero emissions target it will “encourage 100 of our largest emitting customers to develop transition plans in key sectors such as energy, transport, buildings and food, beverage and agriculture.”
ANZ’s competitors such as the NAB, Westpac and Commonwealth Banks have previously signalled their intentions to move to a climate and net zero emissions policy, but are yet to confirm specifics.
ANZ says that its climate and net zero emissions policy has been released due to the fact that the bank is “in a unique position, through our lending decisions, to support customers and projects that reduce emissions as well as support economic growth.”
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The bank says it will “only finance the construction of new large-scale office buildings if they are highly energy efficient,” and as of 2021 will begin to disclose “more robust and credible metrics” to map out how its lending decisions have impacted the environment.
ANZ’s Chief Executive Officer, Shayne Elliot has released a statement saying that “the measures announced today focus on supporting large Institutional customers across all sectors in their transition to a low carbon business.”
Elliot continued to explain that “I’m proud of the new policy and we’ve been having very constructive conversations with our customers. This essentially brings us into line with global best practice.”
“Our measures also include the allocation of $1 billion of funding towards supporting customers’ and communities’ disaster recovery and resilience, which stands to benefit rural Australia and communities.”
The announcement comes just a day after the ANZ bank reported a drop in its net profit for the year which was down more than 40%.
The Chief Executive of the Australian Conservation Foundation, Kelly O’Shanassy has said ANZ’s climate and net zero emissions policy represents “baby steps,” urging financial institutions to act faster and more dramatically to lessen the impact of climate change in the future.
“The bank will continue to financially support companies with more than 50% thermal coal exposure, despite acknowledging that companies that make more than 10% of their revenue from thermal coal are materially exposed.”
O’Shanassy continued to explain that “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.”