Banks, superannuation funds, sovereign funds, investment funds all have a kind of 'iceberg' influence on climate change. It's not necessarily because they are up to anything nefarious (which is not to say they are not), but simply that the consumer face of climate related activity is a very small part of a lender’s role in impacting climate change.
When people see CBA reducing their own CO2 emissions by 90% and publishing a Carbon Footprint Calculator, it’s a good look, but banks and investment houses lend money to projects - and by virtue of that point, have a big influence on what gets funded.
The bottom line is that since 2016, of the Australian big four banks, CBA has funded in excess of $14 billion in fossil fuel funding. ANZ is a close second in terms of funding at just under $14 billion, followed by NAB at $9.5 billion and Westpac at $6.7 billion. Various other banks like Macquarie, HSBC and Citibank are also in the billions.
One of the smaller 'big' banks - Bendigo Bank, refuses to lend money to fossil fuel companies:
"WE DO NOT CURRENTLY LEND TO PROJECTS IN THE COAL AND COAL SEAM GAS SECTORS, WE ARE SIMPLY TAKING A PRAGMATIC APPROACH THAT SAYS IT MAKES NO SENSE TO BROADEN OUR FOOTPRINT BY STARTING TO DO SO."
CBA scored themselves the greenwash award this year in what has become one of the time honoured ways to wash this way. On one hand CBA has lent money to organisations who are literally creating CO2 faster than you can breathe, but unless someone told you they were doing so, you'd probably not think twice about it.
What most people see is CBA declaring that they have reduced their own CO2 emissions by 90%, published a Carbon Footprint Calculator for anyone to use, and being committed to 'transition all operational and attributable GHG emissions from their lending and investment portfolios to align with pathways to net-zero by mid-century or sooner, including CO2 emissions reaching net-zero at the latest by 2050, consistent with a maximum temperature rise of 1.5°C above pre-industrial levels by 2100.' I guess 2030 or 2050 is a bit soon...
There are many fine examples of greenwashing and CBA does a rather excellent job. First, you will easily find, when you google CBA - Sustainability; a bunch of consumer products that sells bank services, binds you to them and give them the ability to track you - personal loans, home loans, carbon footprint credit/debit loyalty cards.
But what about the bank's business commitment. The 2022 Annual Report headlines are a great place to play the game of 'spot the missing detail', or better yet, 'find any real details'. Under 'Our Approach to Sustainability':
"AS AUSTRALIA’S LARGEST BANK, OUR AMBITION IS TO SUPPORT THE TRANSITION TO A MORE MODERN, RESILIENT AND SUSTAINABLE ECONOMY. OUR ROLE CENTRES ON LENDING TO SUPPORT THE TRANSITION, HELPING OUR CUSTOMERS WITH NEW PRODUCTS, PARTNERSHIPS AND SERVICES, AND ACTIVELY PARTICIPATING IN THE NATIONAL DISCOURSE ON AUSTRALIAN’S TRANSITION."
"ONE OF OUR PRIORITIES IS TO PLAY A LEADING ROLE IN SUPPORTING AUSTRALIA’S TRANSITION TO A MORE MODERN, RESILIENT AND SUSTAINABLE ECONOMY, WORKING CONSTRUCTIVELY WITH THE PRIVATE AND PUBLIC SECTOR TO SUPPORT INITIATIVES THAT PROMOTE SUSTAINABLE ECONOMIC GROWTH AND BUILD A BRIGHTER FUTURE FOR ALL."
See how it works? In all fairness to CBA, there is an enormous amount of detail on how they reduced their own emissions by 90%, their 'preliminary climate scenario analysis of 74% of exposures / reported financed emission for 80% of 2020 lending'. And they do claim to have funded $30.6billion of sustainability funding. The fact however remains that they are the single biggest funder of fossil fuel projects in Australia, with ANZ not far behind them.
It's pretty straightforward really. The biggest impact a bank or lender has is who they fund - and therefore what they fund. Ask the question - do your research. It's very very easy to find out. Then you can make an educated, informed decision, based on the balance you seek to strike. Market Forces has created a table of all banks in Australia and their funding position. It isn't the only reference point as you should also read the bank's positioning.