Home World Business ‘Pythonesque’: Westpac’s climate policy seen to rule out lending to Adani coal

‘Pythonesque’: Westpac’s climate policy seen to rule out lending to Adani coal

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Westpac’s decision to effectively rule out lending to the proposed giant Adani coal mine in Queensland has drawn praise from environmentalists but prompted the Turnbull government to dub the move “Pythonesque”.

The bank on Friday released its updated position statement on climate change, stating Westpac had “long recognised that climate change is one of the most significant issues that will impact the long-term prosperity of our economy and way of life”.

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The government using taxpayers’ dollars to support the Adani coal mine is the kind of policy that will see it “smashed in an election”, says 2GB’s Alan Jones.

Westpac will aim to increase lending to “climate solutions” such as renewable energy and energy efficiency by two-thirds from current levels of about $6 billion to $10 billion by 2020 and quadruple it to $25 billion by 2030.

The bank, though, said it would not lend to any to any new coal project supplying power stations that fell below the top 15 per cent of global energy quality.

New mines producing coal will less than 6300 kilocalories per kilogram won’t get Westpac finance, a level that is a quarter above the roughly 5000 kCal/kg energy content of coal expected to be produced by the $16 billion Carmichael mine Adani plans for the Galilee Basin.

“With this policy change, Westpac has raised the bar on climate change for the other big banks, becoming the first major [Australian] bank to put restrictions in for new thermal coal mines,” Julien Vincent, Market Forces Executive Director, said.

“With such a toxic political debate on coal at the moment, and a government falling over themselves to throw money at this dirty fuel, statements like these send a powerful message that coal is rapidly going out of fashion in the business and finance community.”

Ron Watson, a spokesman for Adani, said it was “disappointing the finance house…had chosen to bow to environmental activists”.

Westpac's latest lending standards appear to rule out a loan to coal aspirant Adani. Westpac’s latest lending standards appear to rule out a loan to coal aspirant Adani. Photo: LUKE SHARRETT

The Indian-owned company had “never applied to Westpac or other banks in Australia” to fund the mine, Mr Watson said.

Westpac’s move is also puts pressure on the Turnbull government which has indicated it would back a loan of as much as $1 billion to support rail links in order to boost the otherwise doubtful financial prospects of the Carmichael and other Galilee coal mines. 

Westpac has its sights on a lower-emissions future. Westpac has its sights on a lower-emissions future. Photo: Supplied

Matt Canavan, minister for resources and northern Australia, derided Westpac’s move as “Pythonesque” as the miner hadn’t yet sought funds from the bank. 

“It seems to me that some corporations are unfortunately today are wimps in regard to standing up to these activists,” Mr Canavan told journalists, attributing Westpac’s move as response to recent protests at a bank event.

Prime Minister Malcolm Turnbull (right) met India's Adani Group founder and chairman Gautam Adani during a visit to ... Prime Minister Malcolm Turnbull (right) met India’s Adani Group founder and chairman Gautam Adani during a visit to India this month. Prime Minister Malcolm Turnbull is looking to refresh and deepen Australia’s relationship with India during a four-day visit to the subcontinent. (AAP Image/Mick Tsikas) NO ARCHIVING . Photo: Mick Tsikas/AAP

“You know a few people angrily appear at a dinner that Westpac held and they apparently change the world.”

He suggested that the bank should revert to its former name, the Bank of NSW.

David Barnden, a lawyer with Environmental Justice Australia said Westpac’s decision would impact the Northern Australia Infrastructure Facility – the fund that would extend the rail loan.

“NAIF must have regard to the best practice of Australian commercial financiers like Westpac when it makes its decisions,” Mr Barnden said.

“It would appear impossible for NAIF’s directors to make a decision to support the Adani or Aurizon railway proposals that would cart poor quality coal from the Galilee Basin to the Great Barrier Reef coast and stay within the law.”

Ian Macfarlane, the chief executive of the Queensland Resources Council, said Westpac had over-reached.

“It is extraordinary that a bank like Westpac, would now be judge, jury and executioner on whether something is environmentally sustainable in a new basin such as the Galilee regardless of the outcomes of permitting and court processes,” Mr Macfarlane, a former federal energy minister, said.

“Westpac, along with the other three majors who recently pleaded with the federal government not to have a Royal Commission into their operations, expect politicians to protect them from public attack,” he said. “[A]t the first whiff of grapeshot from an extreme green activist group, [they] run away from the economic development of north Queensland and the jobs that it will provide.”

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