National Australia Bank says it will halt all lending for new thermal coal mining projects, becoming the first major Australian bank to phase out support of thermal coal mining.
While the bank will continue providing finance for coal projects already on its books, NAB said an orderly transition to a low-carbon Australia was critical for the economy and for continued access to secure and affordable energy.
“While we will continue to support our existing customers across the mining and energy sectors, including those with existing coal assets, NAB will no longer finance new thermal coal mining projects,” the bank said in a statement on Thursday.
The news was welcomed by environmental groups.
“This is a market-leading position for an Australian bank and is even stronger than the position taken by Commonwealth Bank last month because it is formal policy,” Greenpeace campaigner Jonathan Moylan said.
The Commonwealth Bank indicated to shareholders in November that it would not fund new, large coal projects, saying its support for coal would continue to decline as it helps finance the transition to a low-carbon economy.
ING has promised to phase out coal within a decade and has committed to stop funding any utility company which relies on coal for more than 5% of its energy.
ANZ and Westpac both have policies that limit lending to new coal projects under certain conditions.
“NAB has lifted the bar above its competitors by becoming the first major bank to end lending to all new thermal coal mining,” said Julien Vincent, executive director of environmental finance advocates Market Forces.
“This policy means NAB joins the ranks of dozens of banks and insurance companies globally that are withdrawing from this most climate-polluting of industries.”
The World Bank has also announced it will “no longer finance upstream oil and gas, after 2019” in an effort to be consistent with the Paris Agreement goal of limiting warming to 1.5C.
“It’s time for ANZ and Westpac to do the same and rule out investing in new coal projects,” Moylan said.
Last month, Australia’s financial regulator warned banks, lenders and insurers that they had to do more to reduce risk relating to climate change, and flagged the possibility of “regulatory action” if they didn’t act.
- With Australian Associated Press