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Summary
- ANZ released an ambitious climate change policy on 29 October, vowing to exit thermal coal by 2030 and stop lending finance to new coal mines and power stations straightaway.
- While conservationists embraced, Nationals MPs were left infuriated by ANZ's new emission policies to stop lending to its biggest clients unless firms can show carbon transition plans by 2021.
- Australia's largest trading partners China, Japan, Britain, and South Korea – have committed to net-zero targets within the next few decades, weakening the future sustainability of the fossil fuel industry of Australia.
Australia and New Zealand Banking Group (ASX:ANZ) and (NZX:ANZ) is a dual listed stock that unveiled its latest climate change policy, which will see the Bank moving away from funding thermal coal and switching to a zero-emissions economy by 2050.
The policy commits the Bank to halt any direct financing to any new coal-fired power plants or thermal coal mines including expansions and only lend to renewable or gas power generation by 2030.
ALSO READ: How is climate change impacting the way NZ businesses operate?
Under ANZ's strategy, it will no longer fund any new customers with above 10% thermal coal exposure. It will ask for specific, time-bound, public diversification approaches from current customers with more than 50% exposure to thermal coal.
ANZ climate policy drew sharp criticism
On 29 October, 2 most senior MPs of Nationals Party initiated an unexpected attack on ANZ for the new environmental policy of the Bank to limit its lending to coal producers.
However, conservationists have carefully acknowledged ANZ's pledge to avoid lending to its most prominent clients unless firms can show carbon transition plans by 2021.
While Australian Minister for Agriculture, David Littleproud of Nationals Party stated that the plan was damaging to the farmers of the country and called this stategy of ANZ as "virtue signalling".
He added that banks must not try to become society's moral compass, and people should reassess using banks that inflict paralysing new carbon targets and penalties on the farming families.
DO READ: How is the Banking Sector dealing with Climate Change Related Systemic Risks?
Littleproud stated that the policy showed that ANZ was out of touch with the regional communities and pledged to re-examine any policy lever at their disposal to shield farmers from illogical political boardroom agendas by the federal nationals.
ANZ also drew additional scrutiny from Market Forces, the clean-energy activist that stated that policies of ANZ are miserably contradictory to the Paris Agreement, encouraging it to finance businesses that persists to grow the fossil fuel industry.
The Group also asserted that ANZ has given coal companies a further 5-year window to plan business diversification.
ANZ on footsteps of other countries to achieve carbon neutrality
The Bank joined over 100 other banks globally in rejecting any financial backing to new coal projects, following parallel decisions made by major banks in Japan, which is Australia's biggest market for thermal coal used in generating electricity.
ALSO READ: Carbon Dioxide Emissions off the cliff in 2020, Coronavirus the Climate Change hero!
While Japan and South Korea pledged to achieve net-zero emissions by 2050, China committed to carbon neutrality by 2060, which is likely to require the country's electricity system to get net-zero CO2 emissions by 2050.
The commitment to net-zero targets undercuts the future feasibility of Australia's fossil fuel industry.
On 30 October ANZ last traded on NZX at NZ$20.12, up by 1.93% from its previous close and on ASX at AU$18.985, up by 1.52% (at AEST 15:18 PM).
