Acknowledgements We would like to thank Monica Richter (World Wide Fund for Nature and the Science Based Targets Initiative) and Ariel Pinchot (World Resources Institute) for kindly reviewing this report. We also thank the banks listed for reviewing and providing feedback on information about their climate commitments and actions. ClimateWorks Australia is a not for profit working within the Monash Sustainable Development Institute. It provides independent research and advisory work for a range of governments and businesses, and has previously conducted advisory work or consulted with some of the companies included in this report. ClimateWorks may receive future funding from institutions included in this report. National Australia Bank is currently partnering with ClimateWorks on the Natural Capital Investment Initiative as part of the Land Use Futures program.

This banking sector report is part of a series of Net Zero Momentum Tracker[1] assessments focusing on a sectors within the Australian economy. Net Zero Momentum Tracker is an initiative that demonstrates progress towards net zero greenhouse gas emissions in Australia. It brings together and evaluates climate action commitments made by Australian businesses, governments and other organisations.

Achieving net zero emissions prior to 2050 is a key element of the Paris Climate Agreement[2] to limit global temperature rise to well below 2 degrees Celsius above pre-industrial levels and to strive for 1.5 degrees.

Banks can facilitate investment in Australia’s net zero transition

Banks are increasingly aware of the need to decisions of Australian businesses, report on and reduce emissions associated households and individuals. As financial with their operations, investments, products intermediaries, banks have considerable and services. To date, 130 banks from 49 influence in directing investment to support countries, including Australia, have signed Australia’s transition to a net zero emissions The Principles for Responsible Banking[3] to economy. align their business strategies with the goals Banks influence emissions in two ways: of the Paris Climate Agreement. Together, directly through their operations, such as these companies own US$47 trillion in energy use in offices and branches; and assets1. indirectly through their investments, products This report assesses emissions reduction and services. In terms of climate change commitments and activities to evaluate the impact, the banking sector’s operational Australian banking sector’s alignment with emissions are insignificant compared to the achieving net zero emissions by 2050. It emissions associated with the activities that focuses on Australia’s 20 largest banks, banks finance[5], for example through based on the total value of their Australian personal and corporate loans, mortgages and assets. These 20 organisations include banks investments in fossil fuel extraction, energy with the highest reported emissions in generation and real estate. These emissions Australia. are often referred to as portfolio or financed emissions. Banks are a dominant component of Australia’s economy. Five of Australia’s 20 Of the 20 banks assessed, nine were found to largest companies by market capitalisation2 have a net zero before 2050 target for their are banks[4] and banking institutions play a operational emissions, but none have a fundamental role in enabling the financial comprehensive net zero emissions target that

1 An asset in this context is a resource 2 Market capitalisation is a measure of a publicly listed with economic value owned or controlled with the company’s value, calculated by multiplying the number expectation that it will provide a financial return or of shares held by the company’s investors by the benefit current share price. includes both their operational and portfolio The remaining 15 per cent of banks assessed emissions. have not announced any emissions reduction commitments or activities for their portfolio Our analysis found 85 per cent of the banks emissions. assessed are taking steps to reduce their portfolio emissions, of which: This analysis found that initiatives targeting bank portfolio emissions, which include setting • 25 per cent (including Westpac) are emissions targets for some lending and committed to the Science Based Targets investment activities, divestment from certain initiative (SBTi), which will require financial emissions-intensive sectors and provision of institutions to set targets in 2020 for their sustainable finance and low carbon products, portfolio emissions. These targets must are typically ad hoc and not strategically correspond to the level of emissions aligned with transitioning to net zero required to keep global warming to well emissions before 2050. below 2 degrees. • 35 per cent (including Commonwealth Setting targets to align emissions associated Bank) have committed to achieve net zero with bank investment and lending portfolios emissions by 2050 for some but not all of with net zero before 2050 is critical, as banks their investments or lending activities. play an important role in shifting funds to low- • A further 25 per cent (including ANZ and carbon activities to achieve the Paris Climate NAB) are taking steps to reduce their Agreement goals. portfolio emissions but have not made any net zero commitments.

Momentum towards net zero emissions in Australia’s banking sector

Although not reported under the NGER Act, the influence of the banking sector on SECTOR INFLUENCE emissions associated with investment and Banks have significant lending activities is more extensive. As investors and capital providers, banks have influence on Australia’s the means to play a significant role in the economy transition to a net zero emissions economy by supporting the shift of capital to low-carbon Financial services is Australia’s largest activities[5]. economic sector3, and over half the assets4 Globally, major financial institutions are within this sector are held by banks. The acknowledging the necessity of the transition financial services sector also includes to a low emissions economy. For example, insurance, superannuation and other HSBC has pledged to invest US$100 billion6 managed funds[6]. by 2025 to address climate change and is Australia’s banking sector is heavily among a large proportion of major influenced by four banks: Australia and New multinational banking corporations that have Zealand Banking Group (ANZ), made similar commitments[9]. Commonwealth Bank of Australia, These commitments are motivated by several National Australia Bank (NAB) and Westpac factors, including new business opportunities Banking Corporation. These four banks and reputational and financial risks due to collectively hold around three-quarters of the ongoing investment in emissions-intensive total assets held by Australian banking activities[10]. Litigation against those who institutions. All four are amongst the 50 largest finance activities that contribute to climate banks in the world based on the value of their change is also a growing prospect. In 2017, assets[7]. Commonwealth Bank was sued by investors for failing to disclose its climate change risk exposure. Charges were eventually dropped after the bank updated its climate-related GLOBAL CONTEXT financial disclosures and strategy[11]. Banks can play a vital role The Network for Greening the Financial System, a consortium of 42 central banks and in achieving net zero banking supervisory authorities, has published emissions before 2050 recommendations for the financial sector’s role in achieving the 2015 Paris Climate Reported emissions arising from bank Agreement goals[12]. These operational activities, such as energy recommendations call on central banks to set purchased for branches, offices and company an example by adopting sustainability criteria vehicles, represent a small proportion of for their investment portfolios. Australia’s emissions. The five banks required to report their emissions under the National In Australia, the four major banks – ANZ, Greenhouse and Energy Reporting Act 2007 Commonwealth Bank, NAB and Westpac – have all expressed support for the Paris (NGER Act)5 are responsible for 0.1 per cent of the total emissions reported in the index[8]. Climate Agreement. These banks are

3 Based on Gross Value Added (GVA), a term used in 5 The criteria which determine which facilities and economics to describe the value of goods and services corporations are required to submit emissions and produced by an area, industry or sector of an economy. energy reports under the NGER Act are outlined at GVA provides a dollar value for goods and services http://www.cleanenergyregulator.gov.au/NGER/Repor produced, minus the cost of all inputs and raw ting-cycle/Assess-your-obligations/Reporting- materials directly attributable to that production. thresholds. 4 For example, cash, commodities, real estate and 6 All financial values are in Australian dollars, unless financial products such as stocks and bonds. otherwise specified. collaborating with other prominent financial institutions through the Australian Sustainable PLEDGE PLATFORMS Finance Initiative to determine how the financial services sector can support Climate action initiatives that have been Australia’s transition to net zero embraced by Australian banks include: emissions[13]. • The Science Based Targets initiative Divestment7 from fossil fuels is gaining (SBTi) is a collaboration between CDP momentum. In 2017, the World Bank, ING (formerly the Carbon Disclosure Project), Group and AXA announced plans to divest the UN Global Compact, the World from coal, oil, and gas. Multiple not-for-profit Resources Institute and the World Wide groups are putting pressure on financial Fund for Nature. SBTi considers targets to institutions to cut the financial value chain of be science-based if commitments are fossil fuels. In Australia, although the major consistent with limiting global temperature banks continue to provide billions of dollars of rise to well below 2 degrees Celsius or 1.5 direct project finance for new fossil fuel degrees Celsius above pre-industrial projects, the combined value of loans levels. SBTi’s goal is for target-setting provided to the fossil fuel industry has recently based on this definition to be standard declined [14, 15]. business practice by 2020 for direct and value chain emissions as well as Banks are also making commitments to purchased electricity. SBTi’s approach provide ‘green finance’ for climate change does not require organisations to make an solutions. In 2015, ANZ committed to facilitate explicit pledge to achieve net zero at least $10 billion by 2020 to fund a range of emissions by 2050. However, SBTi targets climate mitigation and adaptation can be considered to be aligned with measures[10]. Since 2014, NAB has been pathways to net zero by 2050. This is issuing green bonds to raise capital for because most scenarios show that, to renewable energy infrastructure and low remain below 2 or 1.5 degrees Celsius, emissions residential and commercial developed countries will have to achieve property[16, 17]. net zero emissions by around 2050. Three However, banks in Australia are yet to Australian banks – Bank Australia, implement specific targets to align their Teachers Mutual Bank and Westpac – and financial activities with achieving net zero two subsidiaries of international banks – emissions before 2050. One barrier for setting ING Bank (Australia) Limited and HSBC emissions targets for investment and lending Bank Australia Limited – have publicly activities is ambiguity regarding which committed to define targets which comply economic activities and investments most with SBTi’s criteria. effectively contribute to the transition to net • The We Mean Business coalition’s RE100, zero emissions and how to measure EP100 and EV100 initiatives, which aim to progress[18, 19]. To address this, the Network encourage corporations to switch to 100% for Greening the Financial System renewable electricity (RE100), optimise recommends implementation of a energy productivity (EP100) and classification system that will help to identify accelerate the transition to electric environmentally sustainable investments[18]. transport (EV100). ANZ, Bank Australia, SBTi is also developing a methodology for Citigroup, Commonwealth Bank, HSBC financial institutions to set targets that will Bank Australia, ING Bank (Australia), align their investment and lending portfolios Macquarie and Westpac are signatories to with emissions reduction pathways consistent the RE100 initiative. AMP Capital’s with net zero by 2050[20]. Wholesale Office Fund has joined EP100

7 Refers to the process of selling off certain business interests and investments to remove them from investment and lending portfolios. through its commitment to only own or investors, lenders and insurers. ANZ, develop real estate that is net zero Commonwealth Bank, Macquarie, NAB, emissions in operation by 2030. Suncorp and Westpac have indicated their • The Principles for Responsible Investment support to the TCFD. and Principles for Responsible Banking, which were launched in 2006 and 2019 respectively by the UN Environmental Programme Finance Initiative. They both ANALYSIS incorporate principles to align business practices and set targets that are Australian banking sector consistent with the UN Sustainable Development Goals and the Paris Climate climate commitments Agreement. ANZ, Citigroup, ING, NAB, The Net Zero Momentum Tracker assessed Rabobank, Suncorp and Westpac have the pledges, commitments and activities of 20 signed the Principles for Responsible Australian banks to evaluate their degree of Banking. The Principles for Responsible alignment with achieving net zero emissions Investment have been signed by AMP, before 2050. HSBC, Macquarie, Suncorp and the The analysis focused on the 20 largest Westpac subsidiary, BT Finance Group. Australian banks, based on the value of their • Take2, which is a pledge initiative led by resident assets8. Sixteen of these banks have the Victorian Government. It provides a headquarters in Australia and four are platform for individuals and organisations subsidiaries of international banks that are to pledge action and initiatives to address managed independently in Australia9. climate change. Four Australian banks, Table 1 summarises this assessment. It ANZ, Bank Australia, NAB and Suncorp, provides an indication of each bank’s net zero have made a Take2 pledge. ambition based on analysis of pledges, • Carbon neutral certification under the commitments and activities that addresses Australian Government’s National Carbon direct and indirect emissions from operational Offset Standard (NCOS). This standard activities and emissions associated with allows Australian organisations to offset investment and lending portfolios. emissions by purchasing offset units for their operational emissions, including Table 2 provides an assessment of each direct emissions and purchased electricity. bank’s investment and lending portfolio Proceeds from the sale of offset units are emissions reduction activities and initiatives used to support reforestation, renewable for four investment and lending categories energy and energy efficiency projects. (corporate finance and business lending, ANZ, Bank Australia, NAB and Westpac project finance, real estate and mortgages). are NCOS carbon neutral certified. These categories reflect those used in SBTi’s • The Task Force on Climate-related proposed target-setting methodology for Financial Disclosures (TCFD) financial institutions. recommendations [21], which provide a Table 3 shows an assessment of operational voluntary reporting framework for emissions reduction activities and initiatives, organisations to disclose their financial with a focus on renewable energy use, energy risks due to climate change. The TCFD efficiency improvements, fuel switching (such was established in 2015 at the request of as electrification of buildings and facilities) and G20 Finance Ministers and Central Bank the mitigation or offsetting of non-energy Governors with a remit to develop emissions. consistent climate change related risk disclosures to inform stakeholders such as

8Assets owned and managed in Australia, as reported in The 9 Overseas banks registered with APRA that have Australian Australian Prudential Regulation Authority (APRA)’s Monthly branches but do not have a subsidiary operating in Australia Banking Statistics, June 2019. as a separate legal entity were excluded. Supporting detail for Tables 1, 2 and 3 is committed to define targets which comply with provided in the Appendix. SBTi’s criteria. During 2020, when SBTi’s Our ‘overall net zero ambition’ analysis finds finance sector methodologies are due to be that 18 banks (90 per cent of the 20 banks finalised, SBTi’s criteria will require these considered) are taking steps to reduce their banks to submit targets consistent with net emissions, either through emissions reduction zero by 2050 for their operations and their targets, more general commitments or investment and lending activities. initiatives that will reduce their greenhouse Although most of the 20 banks assessed have gas emissions. not defined emissions targets for all their Of the 20 banks assessed: investment and lending activities, all but three • Five (25 per cent) are working towards are undertaking actions that could reduce their setting emissions targets which are financed emissions, such as provision of consistent with a net zero pathway for sustainable finance10, offering low-carbon both their operations and their investment financial products, or pledging to divest from and lending activities. This means that or exclude certain emissions intensive sectors these banks will set a target (through the from their activities. For example, SBTi) that corresponds to the level of Commonwealth Bank has an ambition to exit emissions required in order to keep global thermal coal mining and coal fired power warming to well below 2 degrees generation by 2030. Bank Australia is • Eleven (55 per cent) have committed to offsetting emissions associated with their car achieve net zero emissions by 2050 for loans. Evaluating the significance of these their operations or certain specific commitments is challenging due to limited investments or lending activities. information about financed emissions in the • Two (10 per cent) are taking steps to disclosures of many of the banks reduce emissions, but have not made any considered[10]. commitments to achieve net zero Nine of the 20 banks assessed claim to be emissions before 2050 for either their carbon neutral. These banks are offsetting operations or financed emissions. their operational emissions by investing in • Two (10 per cent) have not announced reforestation, renewable energy and energy any emissions reduction commitments or efficiency projects, for example. While activities. valuable, offsetting is not a substitute for Despite these commitments and aspirations, reducing emissions through energy efficiency none of the banks considered have improvements, use of renewable energy and implemented a comprehensive target to supply chain modifications, and should only achieve net zero emissions for both their be undertaken as a short-term or operations and their investment and lending complementary measure as part of a net zero activities. emissions strategy. Ideally offsetting should only be required to mitigate unavoidable Five banks – Westpac, ING, HSBC, Teachers emissions. Mutual and Bank Australia – have publicly

10 Sustainable finance refers to financial services or products (ESG) issues. Sustainable investment decisions are based on that take account of environmental, social and governance specific ESG criteria. TABLE 1: ASSESSMENT OF NET ZERO AMBITION (FOR OPERATIONS AND INVESTMENT/LENDING PORTFOLIOS) Banks listed are the largest 20 banks based on the value of resident assets reported in APRA’s monthly banking statistics, June 2019 [22]. The table groups the banks by net zero ambition, portfolio ambition and then orders them by resident asset value within each group. This assessment of ambition is informed by Table 5 (included in the Appendix). Overall Net Portfolio Operational Already Total resident Zero emissions net emissions net carbon assets Company ambition zero ambition zero ambition neutral?11 ($ million)

★ ★ ★ …this can be you

■ ■ ★ Y 858,048 Westpac Banking Corporation ■ ■ ★ Y 65,138 ING Bank (Australia) Limited ■ ■ ■ 36,853 HSBC Bank Australia Limited ■ ■ ★ Y 8,030 Teachers Mutual Bank Limited ■ ■ ★ Y 6,319 Bank Australia Limited

▲ ▲ ■ 770,154 Commonwealth Bank of Australia ▲ ▲ ● 74,492 Bendigo and Adelaide Bank Limited

▲ ▲ ★ 62,247 Suncorp Group ▲ ▲ ● 51,194 Bank of Queensland Limited ▲ ▲ ● 25,062 Members Equity Bank Limited ▲ ▲ ★ Y 18,661 Rabobank Australia Limited ▲ ▲ ■ Y 18,310 AMP Group Limited

▲ ● ★ Y 737,617 National Australia Bank ▲ ● ★ Y 585,644 ANZ Banking Group Limited ▲ ● ■ Y 95,618 Macquarie Group ▲ ● ★ 17,349 Citigroup Pty Limited

● ● ● 6,213 Beyond Bank Limited ● o ● 9,201 Heritage Bank Limited

o o o 7,155 Greater Bank Limited o o o 5,817 IMB Limited

Overall rating: Portfolio emissions rating: Operational emissions rating: ★ Fully aligned The organisation has made a pledge to achieve net zero Net zero before 2050 target for Net zero before 2050 target for all reported emissions before 2050. This pledge includes all of the all portfolio emissions. operational emissions (includes those committed direct and indirect emissions the organisation can to remain carbon neutral through both emissions influence. reduction and offsetting). ☆ Closely aligned The organisation has made a pledge to achieve net zero Net zero before 2050 target for a Net Zero before 2050 target for a significant emissions before 2050. This pledge includes a significant proportion (but not all) proportion (but not all) of operational emissions. significant12 proportion (but not all) of the direct and of portfolio emissions. indirect emissions the organisation can influence. ■ Aligned The organisation has an aspiration to achieve net zero Net zero before 2050 aspiration Net Zero before 2050 aspiration or commitment aspiration/ emissions before 2050. Alternatively the organisation has or commitment to align with a to align with a net zero before 2050 pathway for pathway other targets or initiatives which align it with this pathway. net zero before 2050 pathway all reported operational emissions (includes This category includes those committed to the SBTi for all portfolio emissions. (e.g. those achieving carbon neutrality largely through initiative. SBTi commitment). offsetting only). ▲ Partially aligned The organisation has made a pledge to achieve net zero Net zero before 2050 target for a Net Zero before 2050 target for a portion emissions before 2050. This pledge includes only a portion of portfolio. operational emissions portion of the direct and indirect emissions the organisation can influence (for example scope 1 and 2 emissions13 only in the case of banks). ● Not aligned The organisation has made a commitment, pledge or is Activities that will reduce Activities that will reduce operational emissions undertaking activities that will reduce its emissions but not portfolio emissions but are not but are not aligned with net zero before 2050 or in alignment with net zero before 2050, or the alignment aligned with net zero before associated with a net zero pledge. is unclear due to insufficient information. 2050 or associated with a net zero pledge. O No emissions No disclosed emissions reduction targets, commitments Generic expression of intent or Generic expression of intent or no information. reduction targets or activities. no information. or activities

11 Carbon neutral banks are currently offsetting all of their operational emissions. 12 For this analysis, ‘significant’ is considered to cover scope 1 and 2 emissions from owned and managed property assets and 4 out of the 6 asset types used to analyse the portfolio emissions in Table 2 (project finance, real estate, mortgages and loans, equity and corporate finance). 13 Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy. Scope 3 emissions are all indirect emissions (not included in scope 2) that occur in the value chain of the reporting company (including those associated with investments).

TABLE 2: ASSESSMENT OF PORTFOLIO EMISSIONS REDUCTION COMMITMENTS AND ACTIVITIES

This assessment of investment and lending portfolio emissions reduction activities and initiatives is informed by the pledges and commitments summarised in Table 7 (included in the Appendix). The assessment specifically focuses on investment and lending categories inspired by those used in SBTi's proposed target setting methodology for financial institutions. The ‘project finance’ asset class is divided into three categories: electricity generation, thermal coal mining and other project finance. This facilitates deeper assessment of each bank’s relevant commitments/statements.

Project finance

Mortgages Corporate Unallocated15 Electricity Thermal Other Real and finance and sustainable Company generation coal project estate individual business finance exposure mining finance loans lending14 commitment AMP Group ■ o o o o Limited ★ ANZ Banking ■ ■ ■ ■ o ■ $15bn by 2020 Group Limited Bank Australia o o ■ o Limited ★ ★ Bank of Queensland ■ ★ o o o ■ Limited Bendigo and Adelaide Bank o ★ ■ o o o Limited Beyond Bank o o o o o o Limited Citigroup Pty ■ ■ o o o o $100bn by 2025 Limited Commonwealth ■ ■ o ■ ■ $15bn by 2025 Bank of Australia ★ Greater Bank o o o o o o Limited Heritage Bank o o o o o o Limited HSBC Bank ■ ■ o o o o $100bn by 2025 Australia Limited IMB Limited o o o o o o ING Bank ■ o ■ ■ ■ (Australia) Limited ★ Macquarie Group ■ o ■ ■ o ■ Members Equity o o o o Bank Limited ★ ★ National Australia ■ ■ ■ o ■ ■ $20bn by 2025 Bank Rabobank ■ ■ o o o Australia Limited ★ Suncorp Group ■ ★ o o o ■ Teachers Mutual ■ o o o Bank Limited ★ ★ Westpac Banking 16 ■ ■ o o o $28bn by 2030 Corporation ☆ Net zero emissions target or aspiration that includes all assets within ★ investment/lending category. ☆ Explicit emissions reduction commitment that is heading towards net zero. ■ Specific initiative that will reduce emissions with no target or quantified commitment. o Generic expression of intent or no information.

14 Includes listed equity, private equity, corporate loans, corporate bonds and small to medium enterprise lending. 15 Based on the information available, it is not possible to allocate these commitments to any specific investment or lending category. 16 Westpac has an emissions intensity reduction target for its energy generation portfolio at 0.30 tCO2/MWh by 2020. This target was assessed against ClimateWorks Australia’s Decarbonisation Futures analysis and is consistent with a well below 2 degrees Celsius scenario, for the timeframe (by 2020) given. TABLE 3: ASSESSMENT OF OPERATIONAL EMISSIONS REDUCTION COMMITMENTS AND ACTIVITIES

This assessment of operational emissions reduction activities and initiatives is informed by the pledges and commitments summarised in Table 6. This assessment specifically focuses on the use of renewable energy, energy efficiency improvements, fuel switching (such as electrification of buildings and facilities) and the mitigation or offsetting of non- energy emissions.

Total scope 1 and 2 Energy Renewable Electrification/ Non-energy Company emissions efficiency Electricity fuel switching targets (tCO2e) ANZ Banking Group Limited 123,056 ☆ ★ o ☆ Westpac Banking Corporation 121,781 ☆ ★ ■ ☆ National Australia Bank 109,731 ☆ ☆ o ☆ Commonwealth Bank of Australia 78,111 o ★ o ☆ Macquarie Group 32,806 o ★ o ☆ Suncorp Group 25,901 ■ ■ ■ ☆ AMP Group Limited 8,240 ■ o o ☆ Bank of Queensland Limited 4,082 ■ o ■ o Beyond Bank Limited 1,206 o ■ o o Bank Australia Limited 964 o ★ o ☆ Bendigo and Adelaide Bank Limited - ■ ☆ o ■ Citigroup Pty Limited - ■ ★ o o Greater Bank Limited - o o o o Heritage Bank Limited - ■ o ■ ■ HSBC Bank Australia Limited - ■ ★ o ☆ IMB Limited - o o o o ING Bank (Australia) Limited - ■ ★ o ☆ Members Equity Bank Limited - ☆ ☆ o ■ Rabobank Australia Limited - ☆ ■ o ☆ Teachers Mutual Bank Limited - ☆ ■ ■ ☆

★ Specific target that aligns with net zero emissions before 2050. For example: • Efficiency: commitment to EP100 pathway or similar. • Renewable energy: commitment to RE100 or similar. • Electrification: 100% shift to electrification. • Non-energy: Offsetting of unavoidable emissions only. ☆ Activities flagged as supporting a pledge to achieve net zero emissions before 2050. Activities that will reduce emissions but are not aligned with net zero before 2050 or associated with a net ■ zero pledge. o Generic expression of intent or no information.

Case studies Bank Australia’s operations have been carbon neutral since 2011 and the bank sources 100% of its electricity from renewable SCIENCE BASED TARGETS FOR sources. It is a member of the Melbourne FINANCIAL INSTITUTIONS Renewable Energy Project, a consortium of corporate, government, cultural and academic Forty-nine financial institutions worldwide, organisations that supported construction of including banks, have committed to define the Crowlands Wind Farm. The bank has a emissions reduction targets via SBTi, and a long-term power purchase agreement with further 70 have reported that they intend to do this facility. so [20]. In 2018, SBTi acknowledged the crucial role financial institutions play in providing finance for the transition to net zero AUSTRALIA’S ‘BIG FOUR’ BANKS emissions and began developing methodologies specifically for the finance Among the 20 banks assessed in the report, sector. SBTi has proposed target-setting the largest four banks – ANZ, Commonwealth methods for four different categories of Bank, NAB and Westpac – hold over 80 per investment: real estate, mortgages, power cent of total resident assets reported by generation project finance, and a fourth group Australian banking institutions[22] and almost which includes equities, corporate bonds and 90 per cent of the resident assets reported by corporate loans. SBTi’s approach requires institutions included in this study. targets aligned with the Paris Climate Furthermore, these four banks are responsible Agreement goals to be set for each of the four for 78 per cent of the sample’s reported categories of investment, drawing on existing operational emissions – although ANZ, NAB SBTi target setting methods (for example, to and Westpac collectively offset 76 per cent of set emissions targets for buildings in a real these emissions. estate or mortgage lending portfolio). SBTi’s approach is currently being trialled by The ‘big four’ have made strong commitments 29 financial institutions with a plan to launch regarding their operational emissions. For in 2020. example, ANZ, Commonwealth Bank and Westpac have committed to source 100 per cent of their electricity from renewable BANK AUSTRALIA sources through the RE100 initiative. Additionally, ANZ, NAB and Westpac offset As a mutual bank, Bank Australia is owned by their operational emissions and are certified its customers, who can vote on key decisions by the NCOS standard. to ensure the bank’s activities are in line with their values. The bank has a strong focus on Steps by the big four banks to address environmental responsibility and has adopted emissions from their investment and lending relatively ambitious initiatives. Some of these activities are much less comprehensive. initiatives include financed emissions, such as Although all four of these banks have publicly those associated with car loans, which the stated their support for the Paris Climate bank offsets for the life of each loan. Along Agreement, they are yet to demonstrate this with Westpac and Teachers Mutual, it is one support through net zero targets that of three banks based in Australia that have address all operational, investment and committed through SBTi to align their activities lending activities. with a pathway to net zero emissions by 2050. • Westpac is the only bank of the big four to Bank Australia also states that it “has not publicly commit through SBTi to set made and will not make any loans to the fossil targets aligned with net zero emissions by fuel industry”. 2050. In 2020, SBTi will require financial institutions to set targets consistent with the Paris Climate Agreement for However, none of the 20 banks assessed investment and lending activities. Westpac have committed to a comprehensive net zero assisted with development of the emissions target for their investment and methodology SBTi is drafting for this lending portfolios. Setting targets to reduce purpose. these portfolio or financed emissions is • In December 2017, NAB became the first critical, as banks play a key role in funding the of the big four to rule out lending to any transition to net zero emissions through their new thermal coal mining projects[23]. The investment and lending activities. Although other banks have since made several banks are undertaking actions that commitments to limit lending to coal could reduce their financed emissions through mining or coal fired power generation. provision of sustainable finance, low-carbon • Commonwealth Bank has an aspiration to products and divestment from certain align its business lending portfolio “with a emissions-intensive sectors, these banking net zero economy by 2050”. It is also the climate commitments are ad hoc and not only one of these four banks that has strategically aligned with achieving the Paris carried out its own internal assessment of financed emissions and has publicly Climate Agreement goals. disclosed these. The next step for banks is to set targets that • ANZ has developed a project finance comprehensively commit their investment and policy that links interest rates to lending activities to net zero emissions before environmental, social and governance 2050. By making this a public pledge, (ESG) criteria. Australian banks can build momentum to achieve this goal both within Australia and globally.

Next steps

The findings outlined in this report indicate that a significant proportion of Australian banks are taking steps to reduce their emissions, particularly operational emissions. Many have set net zero emissions targets for their operations and are achieving these commitments through energy efficiency initiatives, shifting to 100 per cent renewable energy and offsetting. In addition, Australia’s largest banks have recognised the need to shift funding away from emissions-intensive activities towards more sustainable investments.

Appendix summarise the information used to inform the analysis. In addition to published pledges and targets that support a pathway to net zero COMPANIES AND DATA emissions, the analysis considered other commitments and initiatives that could reduce emissions. The organisations considered by this analysis are the 20 largest Australian banks, based on For the Australian subsidiaries of overseas the value of resident assets reported in banks (Citigroup Pty Limited, HSBC Bank APRA’s monthly banking statistics for June Australia Limited, ING Bank (Australia) 2019. Sixteen of these banks are Australian Limited, Rabobank Australia Limited), and four are subsidiaries of international sustainability and corporate reporting is at a banks that are managed independently in global level. The assessment for these Australia. Excluded were overseas banks organisations has therefore been based on registered with APRA that have Australian global statements and policies. These branches but do not have a subsidiary organisations do not disclose greenhouse operating in Australia as a separate gas emissions attributable to their legal entity. Australian subsidiaries. Table 4 lists these banks, principal activities and data sources consulted. Tables 6 and 7

TABLE 4: COMPANIES AND DATA CONSIDERED BY THE ANALYSIS Pledge Total platforms and Principal resident Emissions data Company sustainable Other sources activities assets source finance ($ million) memberships Annual Report 2018 Wealth Sustainability Report management, 18,310.30 WMB 2018 AMP Group Sustainability investment (for AMP EP100 AMP Capital Real Limited Report 2018 management and Bank) PRI Estate Sustainability retail banking Report 2018 Website WMB Annual Report 2018 RE100 Sustainability Review PRB ANZ Banking 2018 Sustainability Retail banking 585,643.50 Take 2 Group Limited Climate Change Review 2018 Equator Statement 2019 Principles Website TCFD WMB SBTi Bank Australia Impact Report 2019 Retail banking 6,319.60 RE100 Impact Report 2019 Limited Website PRB Take 2

Bank of Sustainability Report Sustainability report Queensland Retail banking 51,193.70 2019 2019 Limited Website Bendigo and Annual Report 2019 Adelaide Bank Retail banking 74,491.50 Annual Report 2019 Website Limited Pledge Total platforms and Principal resident Emissions data Company sustainable Other sources activities assets source finance ($ million) memberships WMB Annual Report 2018 RE100 Citigroup Pty Global Citizenship Global Citizenship Retail banking 17,349.00 PRB Limited Report 2018 Report 2018 Equator Website Principles WMB Annual Report 2019 RE100 Commonwealth Climate Change Retail banking 770,153.80 Equator Annual Report 2019 Bank of Australia Spotlight Article 2018 Principles Website TCFD

Beyond Bank Sustainability Report Sustainability Retail banking 6,212.60 Limited 2018 Report 2018 Website Greater Bank Annual Report 2019 Retail banking 7,155.00 No information Limited Website Heritage Bank Annual Report 2019 Retail banking 9,201.00 No information Limited Website Annual Report for WMB Australia 2018 SBTi Retail banking, ESG update 2019 Social and HSBC Bank RE100 investment 65,138.00 Social and Environmental Key Australia Limited Equator banking Environmental Key Facts 2018 Principles Facts 2018 PRI Website IMB Limited Retail banking 5,816.50 Annual Report 2019 No information WMB Group Annual Report SBTi 2018 RE100 Sustainability Report ING Bank Group Annual Retail banking 65,138.00 PRB 2015 (Australia) Limited Report 2018 Equator Terra Progress Report Principles 2019 PRI Website Annual Report (Group) Investment bank, 95,618.10 WMB 2019 asset (for RE100 Carbon and energy Macquarie Group Carbon and energy management, Macquarie PRI data 2019 data 2019 retail banking Bank) TCFD Website

Members Equity Annual Report 2019 Retail banking 25,062.00 Annual Report 2018 Bank Limited Website Annual Review 2018 WMB Sustainability Report PRB 2018 National Australia Take 2 Sustainability Data Sustainability Data Retail banking 737,617.20 Bank Equator Pack 2018 Pack 2018 Principles Environmental Agenda TCFD 2018 Website Annual Report 2018 WMB Climate Infographic Rabobank PRB 2016-2020 Annual Report 2018 Retail banking 18,661.00 Australia Limited Equator Sustainability Policy Principles Framework 2018 Website Annual Report 2018- 2019 PRB 62,246.80 Responsible Business Responsible Take 2 Suncorp Group Retail banking (for Suncorp Report 2018-2019 Business Report PRI Bank) Environmental 2018-2019 TCFD Performance Plan 2018-2020 Pledge Total platforms and Principal resident Emissions data Company sustainable Other sources activities assets source finance ($ million) memberships Climate Change Action Plan 2018-2020 Website

Annual Report and Annual Report and Teachers Mutual WMB Sustainability Update Retail banking 8,029.90 Sustainability Bank Limited SBTi 2018-19 Update 2018-19 Website

WMB SBTi Annual Report 2018 RE100 Sustainability Report Westpac Banking PRB 2018 Sustainability Retail banking 858,048.00 Corporation Equator Climate Change Report 2018 Principles Position Statement and PRI 2020 Action Plan TCFD

ASSESSMENT OF EMISSIONS informed by the assessment of portfolio REDUCTION AMBITION emissions reduction activities (Table 2), the assessment of operational emissions reduction activities (Table 3), and the Table 5 details the assessment of pledges and commitments summarised in emissions reduction ambition for each of Tables 6 and 7. the banks considered by the analysis. This assessment considers emissions- reduction commitments and activities for This assessment is based on the following operational emissions and those from criteria: investment and lending activities. It is

Emissions reductions Indicates whether a company has a commitment or is undertaking activities that activities? will reduce its emissions. Strength of Indicates whether a company has defined an emissions reduction target (Target), emissions reduction has expressed an emissions reduction aspiration (Aspiration), has committed to commitment define an emissions target (Commitment), or no information can be found regarding an emissions reduction target (No information). Net zero target or Indicates whether a company’s emissions reduction target or aspiration is to commitment? achieve net zero emissions (Yes), is aligned with an emissions pathway to net zero (Aligned) or is neither (No).

Based on the above criteria, each company’s emissions reduction ambition was assessed as follows:

The organisation has made a pledge to achieve net zero emissions before Fully aligned net zero 2050. This pledge includes all of the direct and indirect emissions the ★ target organisation can influence. The organisation has made a pledge to achieve net zero emissions before Closely aligned net 2050. This pledge includes a significant proportion (but not all) of the ☆ zero target direct and indirect emissions the organisation can influence. The organisation has an aspiration to achieve net zero emissions before Aligned 2050. Alternatively the organisation has other targets or initiatives which ■ aspiration/pathway align it with this pathway. This category includes those committed to the SBTi initiative. The organisation has made a pledge to achieve net zero emissions before Partially aligned net 2050. This pledge includes only a small portion of the direct and indirect ▲ zero target emissions the organisation can influence (for example scope 1 and 2 emissions only in the case of banks). The organisation has made a commitment, pledge or is undertaking ● Not aligned activities that will reduce its emissions but not in alignment with net zero before 2050, or the alignment is unclear due to insufficient information. No emissions No disclosed emissions reduction targets, commitments or activities. o reduction targets or activities TABLE 5: ASSESSMENT OF EMISSIONS-REDUCTION AMBITION

Investment and lending portfolio Operational emissions emissions Total Strength Strength Scope 1 Overall Emissions of Net Zero Emissions of Net zero Company and 2 net zero reduction emissions target or reduction emissions target or emissions ambition activities? reduction commitm’t? activities? reduction commitm’t? (tCO2-e) commitm’t commitm’t Westpac Commitm’t Banking 121,781 Yes Aligned Yes Target Yes ■ (SBTi) Corporation Bank Commitm’t Australia 963.8 Yes Aligned Yes Target Yes ■ (SBTi) Limited HSBC Bank Commitm’t Commitm’t Australia - Yes Aligned Yes Aligned ■ (SBTi) (SBTi) Limited ING Bank Commitm’t (Australia) - Yes Aligned Yes Target Yes ■ (SBTi) Limited Teachers Commitm’t Mutual Bank - Yes Aligned Yes Target Yes ■ (SBTi) Limited ANZ Banking 123,056 ▲ Yes N/A No Yes Target Yes Group Limited National Australia 109,731 ▲ Yes N/A No Yes Target Yes Bank Commonwe alth Bank of 78,111 ▲ Yes Target Yes (partial) Yes Aspiration Yes Australia Macquarie 32,806 ▲ Yes N/A No Yes Target Aligned Group Suncorp 25,901 ▲ Yes Target Yes (partial) Yes Target Yes Group AMP Group 8,240 ▲ Yes Target Yes (partial) Yes Target Aligned Limited Bank of N/A Queensland 4,082 ▲ Yes Target Yes (partial) Yes No Limited Bendigo and N/A Adelaide - ▲ Yes Target Yes (partial) Yes No Bank Limited Citigroup Pty - ▲ Yes N/A No Yes Target Yes Limited Members N/A Equity Bank - ▲ Yes Target Yes (partial) Yes No Limited Rabobank Australia - ▲ Yes Target Yes (partial) Yes Target Yes Limited Beyond N/A N/A 1,206 Yes No Yes No Bank Limited ● Heritage N/A N/A - No No Yes No Bank Limited ● Greater N/A N/A - No No No No Bank Limited o N/A N/A IMB Limited - o No No No No

PLEDGES AND COMMITMENTS

TABLE 6: GENERAL EMISSIONS-REDUCTION COMMITMENTS AND ACTIVITIES

Company Emissions commitment Other commitments/activities

Carbon offsets retired in 2018 reached 25,855 tCO2-e, thus Committed to remain operating offsetting all emissions from operations. AMP Group Limited carbon neutral and reduce Energy efficiency improvements have led to higher NABERS Energy operational energy consumption. Tenancy ratings for its buildings. Maintain carbon neutral operations. Aim to reduce scope 1 and 2 Carbon neutral (NCOS certified). ANZ Banking Group emissions by 24% by 2025 and RE100: committed to source renewable power for 100% of energy Limited 35% by 2030 (2015 baseline) – needs by 2025. adopted using the SBTi methodology. Maintain carbon neutral operations. Carbon neutral (NCOS certified). FY25 target: Reduce emissions by Bank Australia RE100 achieved: 100% renewable electricity for operations: 10-year 16% (2017 baseline) – target Limited agreement with the Crowlands Wind Farm as part of the Melbourne exceeded in 2019 with a 50% Renewable Energy Project. reduction below 2017 levels Publicly committed to the SBTi Aims to reduce emissions by maintaining the highest efficiency for Bank of its buildings – e.g. through LED lighting initiative.

Queensland Identify opportunities to reduce exposure to high emissions fuel sources.

Bendigo and Offset some of their carbon Commencement of a LED lighting program. Adelaide Bank footprint. PV Solar program developed in a few centres with aim to expand Limited the project to other branches and data centres. 70% of the power purchased is matched against renewable sources. FY19 initiatives: Implement energy efficiency projects and review renewable energy Beyond Bank FY19 initiative: Reduce emissions opportunities. Limited by 20% (2014 baseline) Install solar panels on head office. Develop a sustainability standard for its properties and facilities. Goal is to be carbon neutral by 2020. GHG emissions targets: - 35% absolute reduction by 2020 - Annual carbon intensity Focus on energy efficiency. Citigroup Pty reduction rate of 9.67% year over RE100: committed to source renewable power for 100% of energy Limited year needs by 2020. - 80% absolute reduction by 2050 Energy targets: -30% absolute reduction by 2020 - Better savings by improving data centre efficiency Science-based emissions reduction target (Scope 1 and 2) Aspiration to offset unavoidable emissions to be carbon neutral Set emissions reduction target Commonwealth using the NCOS and equivalent system. (Scope 3) Bank of Australia RE100: committed to source renewable power for 100% of energy

needs by 2030.

Greater Bank

Limited Company Emissions commitment Other commitments/activities

Aims to reduce environmental impact of operations through a number of initiatives which include: air conditioning replacement and Heritage Bank upgrade for higher energy efficiency and LED lighting. Limited Approve fuel efficient vehicles in its fleet and exclude larger vehicles. [2008] HSBC offsets all remaining emissions Reduce emissions intensity to 2.0 Target to improve data centre efficiency to 1.53 Power Usage HSBC Bank tCO2-e/FTE by 2020. Effectiveness by 2020. Australia Limited Publicly committed to the SBTi. RE100: Committed to source renewable power for 100% of energy

needs by 2030 with interim target of 95% by 2025. IMB Limited Maintain carbon neutral Invest in making operations more efficient and source renewable ING Bank operations. energy when possible. (Australia) Limited Committed to reduce emissions RE100: Committed to source renewable power for 100% of energy by 50% by 2020 (2014 base year). needs [worldwide] by 2020. Publicly committed to the SBTi. Maintain carbon neutral RE100: Committed to source renewable power for 100% of energy Macquarie Group operations. needs by 2025.

Head office building has reduced electricity consumption due to Members Equity improved heating, cooling and lighting efficiencies. Bank Limited Only headquarters as owned building – Green Star certified Carbon neutral (NCOS certified). Aims to source 50% of Australian electricity from renewable energy Maintain carbon neutral by 2025. operations. Has implemented energy efficiency and renewable energy initiatives Has set a science-based target to National Australia in Australia, including: reduce GHG emissions by 21% by Bank - Decommissioning old commercial sites. New energy 2025 (2015 baseline). efficiency purpose built buildings. Aims to reduce energy use by 5% - Improving energy efficiency across its buildings, including by 2020 (2015 baseline). improvements to HVAC, lighting, and re-zoning of after- hours air conditioning. Maintain carbon neutral Mitigates remaining emissions through carbon offsets. operations. Rabobank Australia Use of energy efficiency to reach emissions reduction target. Aims to reduce carbon emissions Limited Purchase of green electricity and green gas. per FTE per year by 10% by 2020,

from a 2013 baseline. Aims to set targets for electricity consumption intensity for all property types, explore initiatives to achieve improved energy performance and set performance target for data centres. Committed to net zero by 2050. Aims to develop a renewable energy strategy for its operations and Reduce scope 1 and 2 emissions allocate budget for this strategy. by 51% by 2030 (2017 baseline). Suncorp Group Assessed feasibility for on-site renewable energy and supply Set emissions reduction target initiatives. using the SBTI methodology. Have joined the Qantas Future Planet partnership, a program for

offsetting carbon emissions. Aims to expand existing fleet greening strategy (Australia) and set targets to reduce fuel consumption and Scope 1 emissions. Offsets emissions through carbon reduction projects. Energy efficient buildings with on-site energy generation from solar. Maintain status as carbon neutral Mandatory installation of solar PV and LEDs for all new owned Teachers Mutual bank. buildings. Bank Limited Publicly committed to the SBTi. Investigating battery storage.

Reducing car fleet and replacing hybrid vehicles with fully electric ones. Maintain carbon neutral operations. Carbon neutral (NCOS certified). Science-based targets set: RE100: Committed to source renewable power for 100% of energy Westpac Banking 9% reduction in GHG emissions needs by 2025, with an interim target of 45% by 2021. Corporation by 2020. Implemented energy efficiency and rooftop solar PV projects. 34% reduction in GHG emissions

by 2030. Publicly committed to the SBTi. TABLE 7: PORTFOLIO EMISSIONS REDUCTION ACTIVITIES AND COMMITMENTS

Project finance Unallocated17 Corporate Real estate Other Total Electricity generation Other project Mortgages and finance and Company Thermal coal mining portfolio Sustainable finance commitments/ assets18 exposure finance individual loans business policy activities lending19 Committed $1.076bn to Reducing exposure to Has a Only finance Incentivises Market-leader in green renewables. thermal coal mining and sustainability- new office customers to and sustainability Will only finance coal-fired focus on existing linked loan to buildings with reduce bonds. power if emissions are 0.8 customers producing coal finance NABERS 4.5 emissions; e.g. Will provide $15bn by tCO2/MWh or lower. that have lower emissions projects with Star rating or provide 2020 towards Encourages customers with intensity. good ESG above. concessional environmentally ANZ Banking $942.6bn coal-fired generation assets Will only lend to new metrics. loans for sustainable solutions. Group Limited to work towards setting customers if their thermal customers to targets to reduce emissions coal operations are less buy energy consistent with less than 2- than half their revenue, efficient degrees Celsius warming. installed capacity or equipment. generation.

Commitment to reduce Exit coal mining sector by Developing a Aspires to align Has a low-carbon Policy to support exposure to coal-fired power 2030 – subject to Australia green mortgage business lending projects funding target development of generation with view to exit having a secure energy with financial with net zero of $15 billion by 2025 technologies that Commonwealth the sector by 2030 – subject platform. incentives for emissions by Climate-bond valued enable low carbon Bank of $976.5bn to Australia having a secure customers that 2050. at $1,845m in 2019. transition. Australia energy platform. improve home energy efficiency.

Lead arranger of project Will no longer finance new Will not Provided $35bn Provided $300m Plans to invest $55bn finance for Australian thermal coal mining finance oil/tar in mortgages for discounted in environmental renewable energy. projects. sands environmentally finance for funding by 2025 Provided asset managers extraction high-performing renewable Issued two SDG with access to renewable projects. residences. energy and Green Bonds including National $806.5bn energy finance expertise Piloted new energy Australia's largest ever Australia Bank through the launch of home loan efficiency. green bond. Carbon Shared Portfolio. rewards for solar panel installation.

17 Based on the information available, it is not possible to allocate these commitments to any specific investment or lending category. 18 For Australian subsidiaries of international banks, total assets is for the entire group. Value of total assets taken from relevant banks’ annual reports for FY2018. 19 Includes listed equity, private equity, corporate loans, corporate bonds and small to medium enterprise lending. Project finance Unallocated17 Corporate Real estate Other Total Electricity generation Other project Mortgages and finance and Company Thermal coal mining portfolio Sustainable finance commitments/ assets18 exposure finance individual loans business policy activities lending19 Renewables represent 70% Limiting lending to the Green financing Facilitate and issue of lending to the electricity thermal coal sector by target of $3bn by climate bonds and generation sector. calorific value. 2020. other green debts Will only lend to an existing instruments to achieve coal-fired generation facility a target of $3bn by if the facility is critical to the 2020. Westpac community or there is a Target to increase Banking 879.6bn reduction in the facility’s target lending to Corporation emissions intensity. climate change solutions from $6bn to Aims to reduce emissions $10bn by 2020 and to intensity of power $25bn by 2030 generation portfolio to 0.30 tCO2-e/MWh by 2020. Investments in All AMP Investments in AMP Capital environmental and social Capital environmental and publishes the initiatives were 7% of AMP Managed social initiatives were carbon footprint of AMP Group Capital’s total assets in Real Estate 7% of AMP Capital’s AMP Capital $145.3bn Limited 2018, which included Funds will be total assets in 2018. managed equity renewable energy. carbon and fixed income neutral by funds for 2030. investors. Bank Australia has no Does not lend to the fossil Offsets Issued a sustainability investments in the fossil fuel fuel industry sector and emissions bond in 2019. industry. This means its does not intend to. associated with Invests50% of impact electricity generation car loans for the fund in programs that portfolio is zero-emissions, life of the loan benefit the planet. Bank Australia as it only consists of and offer a ‘Planet Lending’ $5.7bn Limited investments in renewable discounted represents $325million electricity generation assets. interest rate for customers purchasing a low-emissions vehicle. Has no direct exposure to Does not Established a coal-fired power generators directly fund new Energy and has no appetite for mining Efficient Finance lending to this sector. projects. Will Program with have no the CEFC for Bank of $50.2bn exposure to SMEs. Queensland fossil fuels by 2023 (e.g. will cease funding mining equipment). Project finance Unallocated17 Corporate Real estate Other Total Electricity generation Other project Mortgages and finance and Company Thermal coal mining portfolio Sustainable finance commitments/ assets18 exposure finance individual loans business policy activities lending19 Bendigo and Does not lend to projects in Does not lend to projects in Adelaide Bank $71.4bn the coal and coal seam gas the coal and coal seam Limited sectors. gas sectors. Exploring products that incorporate social Beyond Bank $5.8bn and environmental benefits. Will not provide financial Decreasing global credit Plans to invest Citigroup Pty services for construction or exposure to coal mining. US$100bn in US$1917.4bn Limited expansion of coal fired environmental finance power plants. before 2025 Greater Bank $6.7bn Limited Heritage Bank $9.5bn Limited Will not provide financial Will not finance new Plans to provide services for new coal-fired HSBC Bank thermal coal mines or new US$100bn in power plant projects, Australia US$2558.0bn customers dependant on sustainable finance by subject to the very targeted Limited thermal coal mining. 2025 exceptions of Bangladesh,

Vietnam and Indonesia.

IMB Limited $5.9bn Collaborated to launch the first loan to link the interest rate to Will not finance utilities with Has the the borrower's over 5% reliance on coal ambition to sustainability fired power by end of 2025. align its Dutch Aims for a net- Committed to exit the coal performance Raised first green ING Bank Will phase out lending to commercial energy positive mining sector by 2025. and rating hybrid bond ever: €1 (Australia) €887.0bn individual coal-fired power real estate mortgage Committed to billion for utilities Limited plants by the end of 2025. portfolio with portfolio by reduce sector. Green bond raised to the below 2050. emissions from finance wind energy in the two-degree shipping and Netherlands and Germany. goal by 2040. aviation industries portfolios by 50% in 2050. Project finance Unallocated17 Corporate Real estate Other Total Electricity generation Other project Mortgages and finance and Company Thermal coal mining portfolio Sustainable finance commitments/ assets18 exposure finance individual loans business policy activities lending19 Substantial and long- Invest in and Macquarie $1bn agriculture standing commitment to the provide funds Infrastructure fund targeting renewable energy sector. for clean and Real improvements in Plans to develop a 20 GW technology Assets to on-farm energy pipeline of renewable and energy introduce efficiency and energy projects, including 4 efficiency. carbon and reducing carbon GW in emerging markets. Full range of energy emissions. financial reporting for products that its funds and target set targets to Macquarie investments in the $191.3bn Group green businesses infrastructure within each projects fund to across all reduce GHG stages of the emissions. project lifecycle: development, construction and operations. Members Does not invest in fossil Does not invest in fossil Equity Bank $27.9bn fuels and does not intend to. fuels and does not intend Limited to. Invests €3.8bn in Does not directly finance Does not Assists customers renewables (out of €3.9bn the exploration and directly with transition to energy portfolio). production of coal used for finance the sustainable Has policy restrictions on power generation. exploration agriculture. Rabobank financing of coal-fired power and Australia €590.4bn generation. production of Limited shale gas or other non- conventional fossil natural resources. Committed $15m to Will not directly finance or Will only lend to $310m in low carbon renewable energy invest in new thermal coal and invest in investments in 2018- infrastructure investment. mining projects; will phase companies 2019 Will not directly finance or out of these exposures by whose business Allocated $128m to Suncorp Group $99.3bn invest in new thermal coal 2025. is consistent Green Bonds. electricity generation. Aims with a net zero to phase out of this carbon exposure by 2025. emissions Project finance Unallocated17 Corporate Real estate Other Total Electricity generation Other project Mortgages and finance and Company Thermal coal mining portfolio Sustainable finance commitments/ assets18 exposure finance individual loans business policy activities lending19 economy by 2050.

TMBL has no direct Excludes First Australian bank investment in any large- fossil fuel to have Certified scale greenhouse gas exploration Ethical Investment Teachers polluting activity or and extraction wholesale cash Mutual Bank $7.1bn company. from lending product (RIAA). Limited and investment activities.

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