Recently, we sent a letter to ANZ as a customer, congratulating them on the decision to withdraw financial support from coal , and asking them to also withdraw their financial support of oil and gas. We received a reply. You can see the content of the letter here:
Thank you for your recent email about our lending and climate change. Reducing emissions is a shared societal responsibility and requires a ‘whole-of-economy’ approach. To support the transition to net zero emissions by 2050, our Climate Change Statement focuses on three areas: 1) helping our customers; 2) supporting transitioning industries; and 3) reducing our own impact. Specifically, we are:
supporting more diversified energy customers and increasing our lending to lower carbon energy. This means we will no longer bank any new business customers with material thermal coal exposures, meaning more than 10 per cent. This is down from the current 50 per cent threshold;
engaging with existing customers who have more than 50% thermal coal exposure to support existing diversification plans. Where these are not already in place, we will expect specific, time-bound and public diversification strategies by 2025. We will cap limits to customers which do not meet this expectation and reduce our exposure over time;
further reducing the carbon intensity of our electricity generation lending portfolio by only directly financing low carbon gas and renewable projects by 2030;
not directly financing any new coal-fired power plants or thermal coal mines, including expansions. Existing direct lending will run off by 2030;
disclosing better metrics so the emissions impact of our financing can be tracked annually, starting with commercial property and power generation this year;
funding and facilitating at least AUD50 billion by 2025 to help our customer’s lower carbon emissions. This may include increased energy efficiency, low emissions transport, green buildings, reforestation, renewable energy and battery storage, emerging technologies (such as carbon capture and storage, and hydrogen-based technology), disaster resilience and climate change adaptation measures.
allocating $A1 billion of this towards supporting customers and communities’ disaster recovery and resilience. We will do this by allocating capital to fund or facilitate resilience initiatives for weather related events, or to build resilience against non-weather related disasters such as pandemics.
Although we know that some want more action, faster, we would highlight the following progress over the last five years:
reduced our lending to thermal coal mining by around 70%
increased our direct lending to renewables by around 60%.
We’re also committed to reducing our own emissions in line with the decarbonisation trajectory of the Paris Agreement. We will accelerate the reduction of our own emissions by sourcing 100% of the electricity needed for our business operations from renewables by 2025. Regarding our exposures to customers who operate in oil and gas extraction:
our exposures at the end of our 2020 financial year - $8.2 billion - were lower than they were at the end of 2015 ($8.6 billion)
our exposures have remained relatively static between 2015-2020 – ranging between $7.0-$8.6 billion.
We're wondering what our students feel about this response, and about government action on climate change. Is this enough? Should we ask for more from our bank? Should we change banks? Some of principles of yoga that we see as relevant:
non-violence (ahimsa) - to the planet and it's life forms
honesty (satya) - required from our politicians about the seriousness and urgency of the situation
burning zeal (tapas) - the drive required to act on something that we can't see directly in front of us.
surrender (isvara pranidhana) - being willing to give over to the idea that as human beings, for all our cleverness and ability, we are still part of an ecosystem, not the dominating force in the world.