Australian banks are taking steps towards net zero emissions, but actions are not yet comprehensive.
Prepared by ClimateWorks with the Monash Sustainable Development Institute, the banking sector report is part of a series focusing on major sectors of the Australian economy as part of the Net Zero Momentum Tracker initiative. The Tracker is designed to bring together and evaluate climate action commitments in order to help the banking sector build momentum towards net zero emissions.
As investors and capital providers, banks are significant to Australia’s transition to a net zero emissions economy. The report found 85 per cent of the banks assessed are taking steps to reduce their investment and lending portfolio emissions, but that these commitments are not yet comprehensive or fully aligned with the Paris Climate Agreement goal of net zero emissions before 2050.
While none of the banks have a comprehensive net zero emissions target that includes both operational and portfolio emissions, one-quarter including Westpac from the big four, are preparing to make this commitment, possibly as early as next year.Anna Skarbek, CEO, ClimateWorks
Examining Australia’s 20 largest banks* the report found that:
- 25 per cent of Australia’s largest banks are working towards setting emissions targets which are consistent with a net zero pathway for both their operations and their investment and lending activities.
- Over half (55 per cent) have committed to achieve net zero emissions by 2050 for their operations or certain specific investments or lending activities.
- Two (10 per cent) are taking steps to reduce emissions, but have not made any commitments to achieve net zero emissions before 2050 for either their operations or financed emissions.
- Two (10 per cent) have not announced any emissions reduction commitments or activities.
*The 20 banks were chosen based on the value of their resident assets (assets owned and managed in Australia), as reported in The Australian Prudential Regulation Authority (APRA)’s Monthly Banking Statistics, June 2019.
The next step for banks is to set targets that comprehensively commit their investment and lending activities to net zero emissions before 2050. By making this a public pledge, Australian banks can build momentum to achieve this goal both within Australia and globally.