The controversial Adani coal mine in Queensland is unlikely to get funding from Australia’s big four banks after the second biggest, Westpac, tightened its funding criteria.
Westpac released its third Climate Change Action Plan today, which has a $10 billion target for lending to climate change solutions by 2020 and $25 billion by 2030.
But the detail in the document that has unleashed a political storm is the tightened criteria for funding coal mines.
Westpac CEO Brian Hartzer said: “We will limit lending to new thermal coal projects to existing coal producing basins only, and where the energy content of the coal ranks in the top 15% globally.”
The bank’s tougher criteria rule out Adani’s new $16 billion Carmichael coal mine in Queensland’s Galilee Basin to supply the Indian market.
Westpac’s decision means all four of Australia’s big banks have now turned their back on the project, with NAB ruling out support in 2015 after the CBA parted ways with the project, while ANZ CEO Shayne Elliott said his bank was “not involved and has no plans to be involved in any financing” of the mine.
But Westpac’s new environmental policy has infuriated Queensland LNP senator and resources minister Matt Canavan, who question how the company could call itself Australian before turning to Twitter to say Westpac had “turned its back” on the state.
Westpac has turned its back on Qld by not supporting coal mines in North Qld. Maybe it should revert to its orginal name the Bank of NSW
— Matthew Canavan (@mattjcan) April 28, 2017
Canavan said Westpac’s decision was ridiculous, nonsensical and “Pythonesque”.
“Adani itself hasn’t asked Westpac for a loan. It seems to me that some corporations today are wimps in regard to standing up to these activists. You know, a few people that angrily turned up to a Westpac dinner and apparently changed the world,” he said.
Canavan appeared to call for a boycott of Westpac, saying “it does beggar belief how they can continue to call themselves Australian”.
“I would encourage Queenslanders in particular, but all Australians who are interested in nation-developing and developing the north to back those financial institutions that have those priorities,” he said.
Canavan said good commercial projects will find finance and took a swipe at Westpac, as “a small financier in terms of the world”.
Australia’s oldest and second largest company, at $AU117 billion by market cap, is ranked 26th on the Forbes list of the world’s biggest banks and 72 on its list of the world top 100 companies.
“I’m confident that the development in the Galilee Basin makes sense in terms of the world’s energy needs,” the minister said.
The federal government has been looking at backing the project with a $900 million government loan from the Northern Australia Infrastructure Facility. The money would go towards the 300km railway line needed to transport the coal from the Galilee Basin to the Abbott Point port for shipment to India.
Adani’s billionaire chairman, Gautam Adani, lobbied Malcolm Turnbull for the funds during the prime minister’s recent visit to India, but environmentalists are threatening legal action against directors of the infrastructure fund for breach of their duties if they back the loan.
Their claim is based on legal advice that directors have a duty to assess financial risks associated with climate change.
Meanwhile, Westpac’s new Climate Change Action Plan has pledged to cut the bank’s own emissions by 9% by 2020, and 34% by 2030.
CEO Brian Hartzer Westpac said the bank will also reduce its exposure to the power generation sector.
“Westpac recognises that climate change is an economic issue as well as an environmental issue, and banks have an important role to play in assisting the Australian economy to transition to a net zero emissions economy,” he said.