Which Banks Do - and Don't - Invest in Fossil Fuels
This post was last updated in 2023
Fossil fuels, like coal, oil, and gas, have long been a mainstay of Australia’s economy. And given Australia only recently committed to a carbon emissions reduction target, there has been little incentive to change the level of fossil fuel activity in Australia.
As a consequence, many Australian banks continue to lend money to the fossil fuel industry.
But not all banks – there are so many who never have and say they never will invest in fossil fuel companies.
Curious? Well in this blog post, I provide further details, by answering the following questions:
Plus some related questions such as:
- Does Commonwealth Bank invest in fossil fuels?
- Does ANZ invest in fossil fuels?
- Does NAB invest in fossil fuels?
- Does Suncorp invest in fossil fuels?
- Does Westpac invest in fossil fuels?
- Does the Bank of Queensland fund fossil fuels?
- Do all banks invest in fossil fuels?
Click on the question that most interests you 😊
Which banks invest in fossil fuels in Australia?
According to Market Forces, there are 11 Australian-based banks and 8 subsidiaries which still invest in fossil fuels. This includes the top four banks in Australia – CBA, Westpac, NAB and ANZ- who together have invested over $44 billion in fossil fuel companies since 2016.
Market Forces is an affiliate project of Friends of the Earth Australia and a member of the BankTrack international network. They are focused on greater transparency for the banking sector and advocate for environmentally sustainable behaviour in the finance sector.
If you want to know which banks invest in fossil fuels and how much they have invested over time, you need to check out their website.
They have a comparison table that lists over 115 banks, credit unions and building societies, noting whether or not they have a record of funding fossil fuels.
Their research looks at how much banks have loaned to fossil fuel projects – and records the total amount lent from 1 January 2016 to 30 December 2020.
The first section of their comparison table lists all the banks that have and continue to invest in fossil fuels. These are:
- AMP
- ANZ
- Bank of China
- Bank of Queensland
- Citi Bank
- Commonwealth Bank
- HSBC
- ING
- Macquarie
- National Australia Bank
- Westpac
It also lists the subsidiaries of some of these banks. While these subsidiaries do not loan to fossil fuel companies themselves, they are associated with one of the banks mentioned above.
Subsidiaries to look out for include:
- 86 400 – owned by NAB
- Bank of Melbourne – owned by Westpac
- Bank SA – owned by Westpac
- Bankwest – owned by Commonwealth Bank
- ME Bank – owners by Bank of Queensland
- RAMS – owned by Westpac
- St George – owned by Westpac
- UBank – owned by NAB
The Market Forces website is well worth checking out because if you are with one of these banks you can use the links provided on their website to tell these banks to stop investing in fossil fuels.
I did this with a couple of banks – using the links provided to send messages to the big four banks in Australia. I admit, all I got back was a stock standard reply about the bank’s sustainability initiatives and future commitments.
However, the message does reach them and I believe the worst thing you can do is stay silent on such things. There is no excuse to stay silent since Market Forces have made it so easy to speak up and reach out to these banks, so it’s an action worth taking so banks are aware of how customers feel about these issues.
Which Australian banks do not invest in fossil fuels?
According to the Market Forces website, there are over 100 banks, credit unions and building societies that DO NOT fund fossil fuel projects – so plenty to choose from if you need to make a switch. Some of the banks on their list include Bank Australia, Teachers Mutual, Bendigo & Adelaide Bank and Qudos Bank.
Suncorp is also listed on the Market Forces website as an entity that does not invest in fossil fuels. However ANZ is currently engaged in a takeover bid of Suncorp, so it is not long before Suncorp becomes part of a company that is one of the biggest lenders to the fossil fuel industry.
I was surprised to find that there are so many banks that do not lend to fossil fuel companies. A lot are smaller banks and may not have the range of products normally provided by the big four. Also, some are credit unions and building societies that have additional criteria before they can accept you as a customer (i.e. they are a bank for teachers only, or uni students only etc.).
Of course, looking into each and every one of the banks listed on the Market Forces website can take time.
And for some wacky reason, I put in that time!
I have looked into 65 of these banks and noted the savings and home loan rates these banks have to offer (as of August 2022). If you are interested, you can access this list by entering your details below.
Which banks invest in renewable energy in Australia?
The big five banks in Australia – CBA, NAB, ANZ, Westpac and Macquarie Bank – all invest significant funds in renewable energy projects as they have the capital to invest at scale. However, these banks also invest in fossil fuels – oftentimes at levels exceeding the investment in renewables.
Here is a summary of each of the major banks and how much they invested in the 2022 financial year (information sourced from a report by the Australian Conservation Foundation (ACF)):
Commonwealth Bank
The Commonwealth Bank is the largest bank in Australia and it lent $4.9 billion to renewables projects in 2022. These investments included funding for wind, solar, and hydroelectric projects.
CBA also set a sustainability finding target of $70 billion by 2030 and by 2022 it has already delivered $31 billion in funding to meet this target.
In 2022 CBA lent $5.09 billion to fossil fuels.
Westpac
Westpac is the next largest bank in Australia and in 2022 it invested $3.33 billion in renewable energy projects in 2022.
They claim to be the largest lender in Australia for new renewable energy projects. In 2022 renewables accounted for 80% of their total committed exposure to the electricity generation sector, up from 59% in 2016.
In 2022 Westpac invested $4.54 billion in fossil fuels.
National Australian Bank
The next largest bank is the National Australian Bank and in 2022 it invested $5.36 billion in renewables.
NAB set a target to provide $70 billion in environmental financing by 2025. They met and exceeded this target in 2022, having provided a total of $70.8 billion in cumulative environmental financing since 1 October 2015.
In 2022 NAB invested $4.02 billion in fossil fuels. NAB is the only major bank to invest more in renewables compared to fossil fuels.
ANZ
ANZ is the last of the big four banks and the worst of the four when it comes to the ratio of renewable investments over fossil fuels.
In 2022 it invested $1.51 billion in renewables. In the same year it invested $7.2 billion in fossil fuels – so for every dollar put towards renewables, $4.77 is spent on fossil fuels, which is pretty sad.
Only recently ANZ pledged it will put $100 billion towards decarbonisation initiatives over 8 years, from FY2023 to FY2030.
Macquarie Bank
Similar information on Macquarie Bank could not be found on the ACF report, but it is noted on Macquarie Banks website that they invested $32 billion in green energy assets in the past five years (2017 – 2022). That equates to approximately $6 billion each year.
It is not entirely clear if this is a worldwide investment figure, or Australian investments only but all indications are that this relates to worldwide investments.
We know from Market Forces that from 2016 – 2020 Macquarie Bank loaned $5 billion to fossil fuel companies in Australia.
So is it only the big banks that invest in renewables? What about the smaller banks, the ones that never have and never will invest in fossil fuels?
There is no clear picture out there about these smaller banks and how much they invest in renewable energy projects – it’s not something that is reported or tracked as closely as investments in fossil fuels. You would need to dig through the bank’s websites, to see if they have advertised their investments in renewables.
After looking into some of these smaller banks, I have found that none invest in renewable at the same scale as the big five banks. A lot of the banks and small customer-owned financial institutions do not have the funds to invest in large-scale renewable energy projects. Many engage in retail banking only – not commercial lending.
However that does not mean they do not play a part – many of those that offer commercial lending do provide funding to small, community-based renewable energy projects.
Here are two examples:
- Bank Australia lends to small-scale solar installations owned by community groups or households. In addition, they have supported community energy groups like Bendigo Sustainability Group and Pingala with customer grants through the Bank Australia Impact Fund.
- Bendigo and Adelaide Bank has provided funding to several community renewable energy projects such as Hepburn Wind and Warburton Hydro.
Which Australian bank is best for climate change?
The big four banks – CBA, Westpac, NAB and ANZ – have committed significant funds towards climate mitigation projects however they also lend to fossil fuel projects. While smaller banks don’t invest commercial projects, including fossil fuel projects. On balance they may be best for climate change.
While the larger banks have set goals to phase out funding of thermal coal and increase lending to climate mitigation projects, the fact remains they continue to provide the funding that the fossil fuel industry needs to continue their operations. And that provides the support these companies need to continue with practices that contribute toward climate change.
Climate change is one of the most pressing issues of our time, and the finance sector has a crucial role to play in addressing this. As consumers, we can choose to support banks that on balance provide more support to the fossil fuel industry or support banks that are actively working to mitigate climate change and promote sustainability.
Banks that do not fund fossil fuel companies are banks that are actively committed to mitigating climate change.
Many of these banks also operate in a way that reduces their own carbon footprint. They often set net zero targets for their business operations and they change their operations accordingly.
And they are more community-focused, lending to and supporting community projects.
From this perspective, the best Australian banks that address climate change are the smaller banks mentioned previously, those that do not lend to fossil fuel companies – Bank Australia, Teachers Mutual, Bendigo Bank and Qudos Bank are some examples. Many more are listed on the spreadsheet I have created, which can be accessed here:
Further frequently asked questions:
Does Commonwealth Bank invest in fossil fuels?
From 2016 to 2020 Commonwealth Bank invested over $14 billion in fossil fuels. In 2022 it made $1.8 million in fees from lending to fossil fuels companies. They plan to reduce investment in thermal coal to zero by 2030. Upstream oil and gas extraction will reduce by 27% and 17% from the 2020 baseline.
Does ANZ invest in fossil fuels?
From 2016 to 2020 ANZ has invested close to $14 billion in fossil fuels. In 2022 it made $9.59 million in fees from lending to fossil fuel companies. They don’t have any set targets to reduce investment in fossil fuels – only a commitment that lending takes into account the Paris Agreement goals.
Does NAB invest in fossil fuels?
From 2016 to 2020 NAB has invested over $9 billion in fossil fuels. In 2022 it made $10.99 million in fees from lending to fossil fuel companies. They plan to reduce investment in thermal coal to zero by 2030 and cap oil and gas investment at $3.2 billion.
Does Suncorp invest in fossil fuels?
Suncorp did loan to fossil fuel companies in 2019 however they have since withdrawn from the sector. Now they focus mainly on personal lending plus lending to small to medium businesses and agribusiness and are unlikely to be exposed to large corporations like fossil fuel companies.
While they currently do not invest in fossil fuels, they are set to be taken over by ANZ. Once that occurs, Suncorp will no longer be part of an entity that does not invest in fossil fuels.
Does Westpac invest in fossil fuels?
From 2016 to 2020 Westpac has invested over $6 billion in fossil fuels. In 2022 it made $8.56 million in fees from lending to fossil fuel companies. They plan to reduce investment in thermal coal to zero by 2030 and limit investment in upstream coal and gas by 23% of 2021 levels.
They have also set some clear limits for emissions relating to power generation (a target of 0.10 tCO2e/MWh for Scope 1 and 2 by 2030) and emissions relating to cement production (a target of 0.57 tCO2e/tonne of cement for Scope 1 and 2 by 2030).
Does the Bank of Queensland fund fossil fuels?
From 2016 to 2020 Bank of Queensland invested over $16 million in fossil fuels. However, they no longer lend to fossil fuel companies and have committed to cease funding by 2024. As of 31 August 2022, they had $9.1 million invested in the fossil fuel industry, representing 0.01% of lending.
Do all banks invest in fossil fuels?
Not all banks invest in fossil fuels – in fact, there are over 100 banks and financial institutions in Australia that do not lend to the fossil fuel industry. So as a consumer, you have a lot of choices and very little excuse to continue with supporting those that support the fossil fuel industry. Search term: Which banks invest in fossil fuels in Australia?
xxx Tahsin
After more information? You may be interested in....
7 of the Best Australian Banks – For You and the Environment – there are 7 banks worth looking into if you care about the environment and key information on these is outlined here
How to Go Green in Banking and Choose the Best Bank For You – for a step-by-step process to help you choose the best green bank for you
What is Green Banking and What to Look Out For – for a definition of green, sustainable, ethical and eco-friendly banking, giving you clues into what to look out for
Green Banking – Essential Characteristics To Look Out For – outlining the characteristics of and features of green banking to look out for plus what it means to be a net zero bank
Why Green Banking Matters: Creating a Sustainable Future – if you are wondering if it is worth looking into green banking, you will find some honest answers here
Green Banking Products – Align Your Money with Your Values – for a summary of all the different green branking products out there, with links to banks that offer these
Greenwashing? The Big Four Banks and Climate Change – for information on CBA, NAB, Westpac and ANZ outlining their current position and past actions relating to climate change
Green Banks in Australia – Options Worth Considering – for information on the big four banks in Australia, four green banks in Australia and further details on Teachers Mutual
Going Green – Environmentally Friendly Banks in Australia – for further information on Bank Australia as well as CBA and Westpac, looking at their environmental policies
I like the efforts you have put in this, regards for all the great content.
Thanks for taking the time to comment Jaquan – appreciate the feedback!