New data has revealed that Macquarie Bank has ranked last among Australia’s largest banks in effectively addressing climate-related risks and opportunities related to its net zero commitment.
A new benchmark from the Australian Conservation Foundation (ACF), which evaluates the climate strategies of the country’s five biggest banks, has awarded Macquarie a score of just 50.19 out of 100.
ANZ only ranked slightly above at 50.85, followed by NAB (58.1), CBA (57.86), and Westpac (61.85) leading the charge.
Overall, the ACF noted an improvement in the banks’ strategies to support their commitments this year, with the median score rising from 49 to 55. Notably, the five banks have all committed to achieve net zero emissions as part of their pledges under the UN-convened Net Zero Banking Alliance, it said.
But the ACF does have concerns, noting that while Westpac received the top spot, “serious concerns remain on its oil and gas policy”. Across all banks, it also highlighted a “growing gap” with climate promises and meaningful climate action.
Moreover, it flagged discrepancies between the banks in how they are addressing a range of their commitments.
Namely, it said only the four largest banks – CBA, NAB, Westpac and ANZ – have set some form of requirement for fossil fuel intensive companies to implement a transition plan by 2025.
Even so, details on how the transition plans will be assessed remain elusive, according to the ACF.
CBA is also the only bank that is no longer refinancing clients that lack Paris aligned transition plans.
Moreover, the ACF said “troubling inconsistencies” have emerged in how banks report climate solutions finance compared to how they report financed emissions. For instance, Macquarie has reported the total renewable capacity that it supports despite only financing a small share of that capacity.
Jonathan Moylan, co-author of the report, underscored the need for accelerated progress if the country’s largest institutions are going to help decarbonise the economy.
“The majority of progress made by banks this year was due to the tightening of lending policies to environmentally harmful industries, but bank lending policies remain the area requiring the most action for banks to meet their net zero commitments,” Moylan said.
“While there is encouraging progress, banks cannot rest on their laurels. The stakes are too high – for communities, for nature, for the economy – for banks to shirk their responsibility, as Australian corporate citizens and prudent fiduciaries.”
This assessment comes ahead of the mandatory climate-related financial disclosures that are due to commence next year.
Namely, starting 1 January 2025, new climate reporting requirements will apply to Australia’s biggest listed and unlisted companies and financial institutions, with other large businesses to be phased in over time.
