ANZ is Australia’s biggest funder of fossil fuels, having loaned over $20 billion to the industry since the Paris Agreement. ANZ’s continued financing of fossil fuel expansion – more than any other Australian bank – undermines its commitments to the 1.5°C target of the Paris Agreement and net zero global emissions by 2050. This conduct and ANZ’s severely inadequate fossil fuel finance policies have seen the bank increasingly becoming an outlier in the sector, exposing the company to heightened climate-related financial, legal, regulatory and reputational risks.

ANZ’s policy settings and fossil fuel finance activity are significantly out of step with international and domestic peers. For example, consistent with international best practice, Commonwealth Bank announced in August that it has already made the decision to no longer finance oil and gas, metallurgical coal mining, or coal-fired power generation customers that lack transition plans aligned with the Paris Agreement.

For ANZ to meet its climate commitments, and the expectations of regulators, investors and broader stakeholders, the bank must require all fossil fuel customers to produce credible transition plans before it will provide those customers with new finance.

Financing fossil fuel expansion

The gaps in ANZ’s current policy have enabled our company to continue providing billions to fossil fuel expansion, which undermines the Paris goals.

The Intergovernmental Panel on Climate Change has confirmed projected emissions from the planned lifetimes of existing fossil fuel infrastructure would significantly exceed the carbon budget remaining to limit global warming to 1.5°C.

The International Energy Agency concluded in 2021 that reaching net zero emissions by 2050 means no new or expanded coal mines and no new oil and gas fields should be approved, largely reiterating this finding in 2022 and 2023.

The UN-convened Net Zero Banking Alliance, of which ANZ is a member, has also categorically stated it “does not support the financing of fossil fuel expansion.”

Yet in 2023 alone ANZ loaned $903 million to companies involved in fossil fuel expansion, almost five times as much as Commonwealth Bank.

Between 1 January 2023 and 11 October 2024, ANZ:
Acted as a mandated lead arranger for a $1.24 billion loan for Santos, a company targeting FID on three new oil and gas projects in the coming years.
Arranged $784 million for coal giant Glencore, a company that has openly admitted to not being aligned with the Paris Agreement.
Loaned $125 million to JERA, a company involved in several large LNG expansion projects, including Scarborough and Barossa.
Loaned $50 million to APA Group, a pipeline company developing several new pipelines for the Beetaloo Sub-basin, a project estimated to result in 1.1 billion tonnes of CO2-equivalent over its lifetime.
Participated in a $9.2 billion loan for the world’s largest gas turbine supplier, GE Vernova.
Loaned $172 million to, and arranged a ‘perpetual bond’ for, San Miguel Corporation, the Philippines' biggest gas expander.
Participated in a $4.6 billion loan to Baker Hughes, a company supplying LNG train systems and gas turbines to several of the world’s largest LNG expansion projects.

ANZ’s financing continues to facilitate fossil fuel expansion that is incompatible with global climate goals the bank claims commitment to.

Further disclosure required

ANZ’s current disclosures relating to climate transition plan (CTP) expectations are the weakest of Australia’s big four banks, and lack critical detail regarding implementation in three key areas: assessment criteria, scope of application and impact on financing decisions.

ANZ is the only major Australian bank that will not require scope 3 emissions reductions targets when assessing CTPs, despite scope 3 typically accounting for 90% of upstream fossil fuel companies’ emissions.

The scope of fossil fuel clients ANZ will require to produce a CTP by October 2025 is also unacceptably narrow, exempting clients pursuing expansion in critical fossil fuel sub-sectors such as metallurgical coal mining, gas-fired power generation, and midstream oil and gas infrastructure.
ANZ is the only big four Australian bank that will not require a CTP from clients it provides capital markets services for, despite ANZ arranging $873 million worth of bonds for companies pursuing fossil fuel expansion in 2023.

ANZ has disclosed that “new lending” for oil and gas customers after October 2025 will be dependent on meeting transition plan expectations, but without a requirement to have Paris-aligned scope 3 emissions reduction targets, oil and gas customers will likely be able to secure finance from ANZ while pursuing expansion projects that are dangerously misaligned with the bank's climate commitments.

Regulatory and legal risk

As Australia’s biggest funder of fossil fuels, ANZ may face increasing legal and regulatory scrutiny over the misalignment between its financing decisions and its climate commitments.

Australian misleading and deceptive conduct law requires companies to have a reasonable basis for making climate-related statements, including net zero commitments.

Regulatory enforcement on greenwashing has seen some companies fined several million dollars for misconduct. ASIC Chair Joe Longo has stated “net zero statements and targets, that were either made without a reasonable basis or that were factually incorrect” are a common form of misconduct identified by the regulator.

As stated by the chair of a UN High-Level Expert Group focused on corporate net zero claims: “Non-state actors cannot claim to be net zero while continuing to build or invest in new fossil fuel supply.”

Without disclosing a comprehensive and credible approach to ensuring its fossil fuel customers are aligned with a 1.5°C warming pathway, ANZ does not have a reasonable basis for its commitments to the Paris Agreement and net zero emissions by 2050, leaving the bank open to greenwashing challenges.

This resolution presents an opportunity for ANZ to address these risks and meet the standards set by international and domestic peers.

We urge shareholders to vote in favour of this resolution.