Banks being urged to lend 'green' - Banks lend $5.5bn to coal industry

Age
Saturday 2/10/2010 Page: 4

WESTPAC, Australia's second largest bank, has flagged its lending policies will favour energy efficiency and clean energy projects over new coal fired power stations as momentum grows to introduce a price on carbon emissions. A report to be released today by Greenpeace shows Australia's major banks provided loans worth $5.5 billion to the coal industry over the past five years, seven times more than the $784 million lent to the renewable energy sector. ANZ, recently ranked the world's most sustainable bank, was the biggest financier to Australia's coal industry, says the report by Dutch economic consultancy Profundo, providing loans of $1.7 billion.

It was followed by Commonwealth Bank ($1.6 billion), NAB and Westpac ($1 billion each), and Suncorp ($227 million). Two other institutions surveyed, Bendigo Bank and the Mecu credit union, did not lend to the coal industry. ANZ also provided more finance for coal-fired power stations than any other bank surveyed, at $650 million, compared with the Commonwealth ($546 million), Westpac ($454 million), NAB ($382 million) and  Suncorp  ($18 million). Greenpeace is calling on the major banks to rule out financing a dozen new planned coalfired power stations around the country, including HRL's controversial $550 million coal gasification plant at Morwell.

Greenpeace campaigner John Hepburn said many Australians opposed construction of new coal-fired power stations. "A lot of people have just voted for action on climate change. Those people would actually be quite outraged to realise their savings in the bank are being used to make the problem worse". None of the big four banks would refuse to finance new coal-fired power stations but Westpac media manager Jane Counsel said apart from historical customers, the bank's future funding was likely to focus on energy efficiency and clean energy projects.

"Within Australia, in the short to medium term, we do not expect that new coal-fired electricity generation will be attractive from an environmental viewpoint. Therefore, the application of technological solutions to reduce emissions is critical", she said. The Commonwealth said it had no commitments to new coal-fired power stations and had the lowest debt exposure to single asset Australian coal-fired generation among the major banks.

A spokesman for ANZ, which last month topped bank sector rankings in the global Dow Jones Sustainability Index for 2010, said the bank was Australia's leading renewable energy financier and "we are starting to see a shift in our portfolio from coal to more sustainable alternatives with renewable projects". Profundo's Amsterdam-based analyst, Jan Willem van Gelder, said the world's banks were struggling to develop responsible lending policies given climate change and the need to finance a shift to sustainable energy production.