More than 50 climate change and environment groups have written to Westpac’s new boss, Peter King, saying the bank’s expected revision of its climate policy should rule out backing projects that increase the size of the fossil fuel industry.
Analysis from the campaign group Market Forces, which co-ordinated the letter, claims Westpac has provided $5.4bn to coal, oil and gas projects since the international Paris climate agreement was signed in late 2015, compared to $2bn for renewable projects.
The demands come on a turbulent day for Westpac, which announced on Tuesday it expected a $1.4bn hit to its balance sheet
In the letter, seen by Guardian Australia, the groups say the “climate crisis is well and truly underway” and that impacts from crises linked to climate change, including bushfires and bleaching on the Great Barrier Reef, were “taking an immense personal, societal and economic toll”.
Julien Vincent, executive director of Market Forces, said Westpac’s continuing support for fossil fuel projects was the catalyst for the letter.
“In 2015, Westpac committed to operate in a manner consistent with the goals of the Paris agreement,” he said. “Whether through lack of intent or lack of competence, clearly the bank has failed to live up to that commitment.
“We might argue about the finer detail about how to transition to a low-carbon economy, but we’re certainly not going to get there by heavily lending to the source of greenhouse gas emissions and expanding an industry we’re supposed to be transitioning out of.”
Westpac’s current climate change position statement and 2020 action plan has five “key principles”, including the need for a transition to net zero emissions.
The statement says: “The sooner we can reach net zero emissions, the more opportunity we have of keeping climate change below the two degree ambition.
“The path to net zero emissions needs to be well planned and occur in an orderly fashion. For the energy sector, this means also balancing the needs of energy security, reliability and affordability.”
Westpac’s website says it will be releasing a new position statement on climate change “shortly” to “ensure we remain informed and consider the expectations of our stakeholders and global best practice”.
The letter says Westpac’s new position statement should rule out financial support for projects that expand the scale of the fossil fuel industry.
Companies that plan to expand fossil fuel reserves, production, transportation or combustion should also be refused backing under the bank’s new climate statement.
“This is not an ask that Westpac shuts off all support for the existing fossil fuel industry overnight, as those who seek to distort the debate would have you believe,” the letter says. Instead, it adds, it was a request to stop activities “that make the scale of the fossil fuel industry any larger than it already is”.
Signatories to the letter include the Australian Conservation Foundation, Get Up! Australia, Friends of the Earth and the Australian Marine Conservation Society, alongside a host of local and regional groups. Overseas organisations including the US-based Rainforest Action Network and German group Urgewald are also signatories.
Guardian Australia did not receive a response from Westpac to questions. Westpac says it is Australia’s biggest lender to new renewable energy projects.
The demands from climate groups come as King on Tuesday set aside more than $1.4bn in provisions for costs and writedowns of assets, including more than $1bn in costs related to legal action brought against it by the government’s financial intelligence agency, Austrac.
The $1bn figure includes a $900m provision to pay any potential fine levied by the federal court, but Westpac told the stock exchange the actual figure “may be materially higher or lower than the provision”.
King’s predecessor, Brian Hartzer, and chairman, Lindsay Maxsted, both lost their jobs over the Austrac lawsuit, in which the regulator accused the bank of more than 23m breaches of anti-money laundering and counter-terrorism finance laws, including sending money to pay for suspected child exploitation in the Phillipines.
The lawsuit, filed in November, is currently before the court, which a fortnight ago ordered the parties to file a statement setting out which facts they agree to by the middle of next month.
King said in a statement to the ASX: “In addition to closing relevant products and recruiting an additional 200 people in financial crime and compliance, I am putting in place a clearer accountability regime that will speed up decision making, improve implementation and more clearly define responsibility and its associated risk management.”
Westpac also set aside an additional $260m to pay compensation to customers ripped off by its financial advice and lending arms, and cut the value of assets by about $140m.
It expects “significant” further damage from the Covid-19 pandemic.
