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r bAnks iA’s big fou Al How Austr ollution pping up p Are pro
ARS OF PILL L LU T I O N PO
Australia has some of the most abundant sources of clean energy in the world. With the right investment and supportive policies, we could quickly become a clean energy powerhouse, creating jobs and boosting the economy while cleaning up our environment. Unfortunately, the big four banks are pouring money – your savings – into the most polluting form of power: coal. Burning coal is the single biggest contributor to global warming. Global warming threatens the safety of our planet, our health and our future.
Australia’s banks must stop pouring our money into polluting coal power and redirect it to pollution-free, clean energy solutions.
Our cOal DepenDence
With everything we know about global warming and the clean energy technologies available, you would think that coal would be on the way out. Shamefully, the exact opposite is true. A lack of political courage by state and federal governments in Australia has meant the expansion of the coal industry has continued unchecked. There are plans on the books for twelve new dirty coal power stations around Australia. If built, they would increase Australia’s total emissions by 7 per cent. Australia is already one of the worst carbon polluters per person in the world and it’s because most of our electricity comes from coal power stations. Our power stations are among the world’s dirtiest, with only eight countries having more pollution-intensive electricity than we do.ii While Australia becomes more dependent on coal we are endangering our health, polluting the air and dirtying the water. We are also hampering Australia’s economic competitiveness as other countries move ahead in the clean energy race.
The first step to a clean energy future is to stop building new coal power stations.
In Australia, the big four retail banks, ANZ, National, Commonwealth and Westpac, are the biggest providers of finance to the coal industry.i They invest billions of dollars in coal mining, coal power stations and coal exports, while promoting an image of community responsibility and environmental sustainability. Financing the coal industry is fuelling pollution and making global warming worse. The impacts of climate change are being felt throughout Australia and the Pacific region, home to the banks’ customers. Australia needs to undergo a clean energy revolution, and the big banks have a vital role to play. To become responsible corporate citizens, ANZ, National, Commonwealth and Westpac need to stop financing polluting coal projects and instead shift investment to renewable energy. The banks have the power to help us achieve the vision of making clean energy bigger and cheaper through financing large-scale solar, geothermal, wind, ocean and other clean energy technologies. Instead, the banks are focusing their efforts on attempting to look green, ignoring the huge environmental impacts caused by the coal projects they finance.
The DirTy DOzen - new cOal pOwer sTaTiOns prOpOseD fOr ausTralia
Project Name Mt Piper Bayswater Coolimba Bluewaters 3 Bluewaters 4 Zero Gen Galilee Phase 1 Galilee Phase 2 Wandoan Arckaringa Hybrid Energy HRL State NSW NSW WA WA WA QLD QLD QLD QLD SA SA VIC Size in mega watts 2,000 MW 2,000 MW 450 MW 208 MW 208 MW 380 MW 450 MW 450 MW 400 MW 560 MW 40 MW 550 MW Estimated emissions Tonnes CO2-e per year 10,470,000 12,428,000 3,800,000 1,500,000 1,500,000 930,000 2,345,000 2,345,000 643,000 2,943,000 196,000 4,000,000 Company Delta Electricity (NSW Gov) Macquarie Generation (NSW Gov) Aviva Griffin Energy Griffin Energy Zerogen (QLD Gov) Galilee Power Galilee Power Stanwell & GE Altona Energy Strike Energy / Hybrid Energy HRL
1 Pillars of Pollution
Our addiction to coal is not a cheap habit. Digging up and burning this energy source is an expensive operation. It can cost several billion dollars to build a new coal power station – more than most energy companies can raise on their own. This is where the big banks come in. ANZ, National, Commonwealth and Westpac – Australia’s largest retail banks – are also the biggest providers of finance to the coal industry.iii Banks lend most of the cost of building a new power station. About three quarters of the costs will usually be financed from a large consortium of banks providing a syndicated loan. For large projects, up to twenty different banks can be involved but there is always at least one bank acting as ‘lead arranger’ or ‘bookrunner’ to pull the whole deal together. Energy companies must also find equity investors to fund up to one quarter of the project.
If you bank with one of the big four, your money is being used to finance the expansion of the polluting coal industry, making global warming worse.
The role of the big four banks is crucial for the financing of coal power stations in Australia. If ANZ, National, Commonwealth and Westpac all refused to finance new coal, it would significantly increase the risk and cost of these projects. International banks would also be less likely to get involved, making it more difficult, more expensive and less likely that coal power stations are built.
financing pOlluTiOn - The breakDOwn
Greenpeace commissioned a specialist finance research group, Profundo, to determine who has been the biggest financier of coal in Australia over the last five years. The results have confirmed that all four big banks are heavily invested in the coal industry.
ANZ is the biggest financier of coal power stations and coal mines, while Commonwealth is the biggest financier of coal export ports.
Finance of Coal Ports
Finance of Coal Power Stations
700 600 A$ Million 500 400 300 200 100 0 $– $– $650 $535 $454 $382
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600 A$ Million
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$440 $309 $220
500 400 300 200 100 0
Finance of Coal Mining
800 700 600 A$ Million 500 400 300 200 100 0 $402 $350 $727
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Total Coal Finance
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BC NA B AN Z CB A N U
coal power stations
ANZ – Australia and New Zealand Banking Group Limited CBA – Commonwealth Bank of Australia (including Bankwest) WBC – Westpac Banking Corporation (including St. George)
NAB – National Australia Bank Limited BEN – Bendigo and Adelaide Bank Limited MECU – mecu Limited
Despite their large-scale investment in polluting power, the big four banks all make concerted efforts to paint a different public image. Almost all of the big banks promote their policies to go ‘carbon neutral’ or to reduce the greenhouse footprint of their operations. What they’re more reluctant to highlight is the part of their business that has by far the biggest environmental impact – their lending practices. There is little point installing efficient light bulbs while continuing to finance the expansion of the coal industry.
Major banks such as ANZ and Westpac have happily accepted sustainability awards while continuing to invest hundreds of millions of dollars into polluting coal power stations. Despite their green rhetoric, none of the banks have ruled out financing new polluting coal power stations, making their continued greenwash a triumph of spin over substance.
3 Pillars of Pollution
spin Or subsTance?
Policy & public statements: • ‘In May 2007, ANZ announced our objective to become carbon neutral in Australia and New Zealand by the end of 2009.’ iv • ‘ANZ has committed to fund only new projects that can be developed and operated according to sound social and environmental standards.’ v Awards: • Dow Jones Sustainability Index – ANZ assessed as No.1 bank globally on corporate sustainability performance. • Carbon Disclosure Project Leadership Index.
• Invested $650 million in polluting coal power stations in Australia in the last 5 years. • Invested $727 million in coal mining in Australia in the last 5 years. • A lead arranger of finance for Bluewaters II, the most recent coal power station built in Australia.
Policy & public statements: • ‘We recognise that our organisation has both a direct and indirect impact on the environment and believe that managing these impacts is an important aspect of sound business management.’ vi • ‘We aim to build a sustainable future and contribute to a better environment for all Australians.’ vii
• Invested $535 million in polluting coal power stations in Australia in the last 5 years. • Invested $402 million in coal mining in Australia in the last 5 years. • Invested $440 million in coal ports in Australia in the last 5 years. • Owns a 2 per cent equity share in Hazelwood – one of Australia’s dirtiest power station. • Invested $382 million dollars in polluting coal power stations in Australia in the last 5 years. • Invested $633 million dollars in coal mining in Australia in the last 5 years. • A lead arranger for finance of Bluewaters II, the most recent new coal power station. • NAB’s investment arm, National Nominees Ltd, is the largest shareholder in Aviva Corporation. Aviva’s projects include the proposed new Coolimba coal power station in WA.
Policy & public statements: • ‘We are committed to making a contribution to the sustainability of our planet by reducing both our direct and indirect environmental impacts.’ • ‘We are leading by example to reduce our carbon footprint and make our operations carbon neutral by September 2010.’ viii Awards: • Listed on the Dow Jones Sustainability Index. • Climate Disclosure Project Global Leadership Index.
Policy & public statements: • ‘Westpac is committed to responsibly managing both our direct and indirect environmental impacts.’ ix • ‘We factor environmental considerations into our investment and lending decisions and adhere to the Equator Principles in managing environmental and social risk in project finance.’ x Awards: • Ranked as one of world’s most ethical companies by Ethisphere. • Gold award for Climate Leadership – Money Magazine’s ‘Best of the Best’ awards.
• Invested $454 million in polluting coal power stations in Australia in the last five years. • Invested $354 million in coal mining in Australia in the last five years. • Invested $220 million into coal ports in Australia in the last five years. • Co-manager of finance of Bluewaters II, the most recent new coal power station built in Australia.
hOw can banks be parT Of The sOluTiOn?
In Australia, while the big four ba nks all provide finance for renewable energy projects, the vast major ity of their investments are in coal.
We have a choice about the kind of world we live in today and what kind of world we leave for our children tomorrow. Greenpeace has laid out a vision for an Australian Energy [R]evolution xi showing how our society and economy can be powered by renewable energy. Modelling commissioned by Greenpeace has revealed that it is technically and physically possible for all of Australia’s polluting coal power stations to be replaced with a combination of seven renewable energy technologies and energy efficiency measures over the next decade. Last year, for the first time, more money was invested globally in renewable energy than in fossil fuels. Wind, solar and other
clean technologies attracted US $140 billion compared with US$110 billion for gas and coal power xii. This trend looks set to continue and is an important signal that an energy revolution is underway. However, despite the positive developments, the transition is not happening quickly enough to avert a climate catastrophe. According to the Profundo research, over the last five years Australia’s big banks have invested over $5 billion into mining, transporting and burning coal and only $0.78 billion into renewable energy.
Renewable Energy vs Total Coal Investments
total coal investments
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5 Pillars of Pollution
ment For real progress, ending invest in new coal power is vital.
While all the banks have a credit policy to guide their investments, at the time of writing none of the big four banks have a clear public policy that would stop them investing in new coal power stations. Yet socially responsible policies are not new for banks. Some have policies to not invest in companies that make cluster bombs; others refuse to invest in brothels, or in nuclear power stations. In 2008, the big four Australian banks all agreed to not provide finance to the controversial Gunns Pulp Mill in Tasmania.
We need the big four banks to stand with the Australian community and make a clear decision to not finance new coal power stations. And we need them to do it now. With twelve new coal power stations on the drawing board around Australia, and with governments unwilling to stand up to the big polluters, banks have a vital role to play in driving the clean energy revolution we so urgently need.
age >> urn Th is p can DO - T whaT yOu
Trying to find out which banks have invested in which coal projects is a bit like trying to find needles in a haystack. The information is often classified as commercial-in-confidence and the banks all disclose investment information in very different ways. Greenpeace commissioned Profundo, an economic research consultancy based in Amsterdam, to conduct the research. We decided to look at the last five years of investment in coal and renewables rather than the banks’ total investments in these sectors, on the basis that the last five years would give a more accurate picture of the banks’ current investment strategy than total historical investments. The investments were identified by using annual reports, stock exchange filings and other publications, company register filings, archives of international financial journals, international press archives, archives of national press publications as well as specialised financial databases. Comprehensive information was not consistently available so a number of assumptions and extrapolations were made, using a similar methodology to that used by the banks themselves. Full details on our methodology is available in the Profundo report online here: www.greenpeace.org.au/dirtybanks/profundo
i ii iii iv Profundo, 2010, Australian banks financing coal and renewable energy http://www.garnautreview.org.au/pdf/Garnaut_Chapter7.pdf page 160 Profundo, 2010, Australian banks financing coal and renewable energy http://www.anz.com.au/about-us/corporate-responsibility/environment/ environmental-footprint/carbon/ accessed 7.9.10 v http://www.anz.com/aus/values/environment/Equator.asp accessed 7.9.10 vi http://www.commbank.com.au/about-us/our-company/sustainability/ environment.aspx accessed 7.9.10 vii http://www.commbank.com.au/about-us/our-company/sustainability/ accessed 7.9.10 viii http://www.nab.com.au/wps/wcm/connect/nab/nab/home/about_us/7/4/2/2 accessed 7.9.10 ix http://www.westpac.com.au/about-westpac/sustainability-and-community/ environment/ accessed 7.9.10 x http://ww2.westpac.com.au/about-westpac/sustainability-and-community/ environment/policy-and-governance/ accessed 7.9.10 xi http://www.greenpeace.org.au/energyrevolution xii http://www.guardian.co.uk/environment/2009/jun/03/renewables-energy accessed 7.9.10
Pillars of Pollution 6
whaT yOu can DO
Your money should go where you want it to: creating a better future with clean energy, not funding polluting coal power. Banks spend millions of dollars each year to improve their reputation, keep existing customers and attract new ones – when we ask for change, they’ll be listening. 1. Let your bank know that you don’t want your money used to invest in more pollution. ANZ • • • • • • 1800 805 154 Complete the online feedback form: http://bit.ly/DirtyANZ Locked Bag 4050, South Melbourne VIC 3205 1800 805 605 Complete the online feedback form: http://bit.ly/DirtyCBA Customer Relations, GPO Box 41, Sydney NSW 2001 1800 152 015 Complete the online feedback form: http://bit.ly/DirtyNAB Head of Customer Resolutions, Reply Paid 2870, Melbourne VIC 8060 1300 130 467 Complete the online feedback form: http://bit.ly/DirtyWestpac Reply Paid 5265, Sydney NSW 2001 2. Drop into a local bank branch and ask to speak to the manager about their coal investments. You can take a copy of this report. 3. Become a Greenpeace Community Activist or join a local Climate Action Group to join others in your community taking action for a clean energy future at bank branches across the country. www.greenpeace.org.au/take-action 4. Credit unions and cooperative banks Credit unions and cooperative banks offer competitive services to the big banks but most don’t invest in polluting coal. Our research showed that both Bendigo Bank and mecu Credit Union had no money in coal. Unfortunately, they also have no money invested in renewables. Credit unions are not-for-profit and every customer is an owner. The incentive is to make your money work for you and your community, not profit from dirty investments. The Australian Credit Union and Building Society Group (www.comesbacktoyou.com.au) represents more than 80 organisations and 4.5 million members.
National Australia Bank • • •
Westpac • • •
want it to: Your money should go where you p, readily available creating a better future with chea ing coal power. clean energy, not funding pollut
Join Greenpeace. We do not accept funding from governments or corporations; instead we rely on the goodwill and generosity of people like you to continue our work. Call 1800 815 151 or visit www.greenpeace.org.au/join
Printed on 100% recycled paper
Greenpeace Australia Pacific
GPO Box 3307, Sydney NSW 2001 L 2, 33 Mountain Street, Ultimo NSW 2007 Ph: +61 2 9281 6100 Fax: +61 2 9280 0380 Email: firstname.lastname@example.org www.greenpeace.org.au
Report updated February 2011. Cover Image ©Greenpeace/Murphy ©Greenpeace/Redondo
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