‘Blacklisting’: Big bank’s major change

Commonwealth Bank has announced it will walk away from fossil fuel companies without genuine plans to achieve the Paris Agreement on climate change, days after it posted close to $10 billion in full-year net profit.

The banking giant announced in 2023 it would require existing oil and gas clients to implement a “transition plan” by next year in order to reach the landmark agreement’s goal of a less than 2C rise in temperatures.

According to its most recent climate report released on Thursday, CommBank revealed it was already in talks with clients whose plan did not meet criteria or who had not provided one before their January 1 exit.

Analysis by Market Forces found the big four bank had already dropped $700 million in lending expenditure in the past year to oil and gas clients and had already halved upstream oil and gas lending since 2022.

Market Forces said CommBank, once a “climate langured” and “enabler of climate destruction”, had already begun applying its new climate policy and now had the lowest lending of the big four to fossil fuel companies.

The bank said the plans would be independently assessed and had to included disclosure of investments in decarbonisation, with the aim under the Paris Agreement of halting the worst effects of climate change.

“Climate change is a collective global challenge requiring co-ordinated action to limit global warming to 1.5C,” Commonwealth Bank Paul O’Malley and Chief Executive Officers Matt Comyn stated in the report.

“While there will continue to be stakeholder interest in any fossil fuel-related activities, as Australia’s largest bank, we remain focused on a secure energy platform … and to evolve alongside Australia’s energy transition.”

Climate activists have for years been ramping up pressure on banks to divest from fossil fuels, with ANZ, NAB, and Westpac either reducing lending to fossil fuel companies or supporting transition plan schemes.

It comes after Commonwealth Bank on Thursday posted a $9.48 billion statutory full-year net profit after tax for 2023-24, down six per cent from the record earnings posted by the big four bank just last year.