Two of Australia’s major banks on Thursday announced initiatives to support the transition to a low-carbon economy, moves which could make it harder to finance the country’s coal industry.
Top lender National Australia Bank will finance A$18 billion ($12.84 billion) through to 2022 to renewable energy projects including low-carbon property and transport, it said in a statement.
Commonwealth Bank of Australia, the second biggest lender, said it would consider environment risks in loan and credit approvals and strengthen due diligence in “high-impact” sectors, without spelling out which areas could be affected.
“We need to be cognisant of the long-term impact our business has on the economies and communities in which we operate,” CBA’s chief executive officer Ian Narev said in a statement.
“An important part of that is rigorously and consistently examining our lending and investment decisions to understand and assess environmental and social impacts.”
Last month, ANZ Banking Group announced plans to lend at least A$10 billion over the next five years to projects that will cut greenhouse gases, ending backing for new coal-fired power plants that don’t use advanced technologies to reduce carbon dioxide emissions.
Australia is one of the largest carbon emitters on a per capita basis due to its reliance on coal-fired power plants and is the world’s largest exporter of coal.
Green groups are increasingly fighting coal projects around Australia, calling on banks not to provide loans citing potential damage to the climate.
Australia’s four largest banks alone have lent more than A$36 billion to fossil fuel projects in Australia since 2008, according to environmental group Market Forces.