Commonwealth Bank stops lending to fossil fuel companies without genuine emissions plan

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Fossil Fuels,Ethical Investment,Green Finance

Australia's biggest bank is blacklisting fossil fuel companies that can't show genuine efforts to reduce emissions, putting pressure on other finance institutions to follow suit.

The Commonwealth Bank has made a major leap in its climate policy, blacklisting fossil fuel companies without genuine emissions plans from its client list.Australia's largest mortgage lender is no longer offering money to fossil fuel companies that are not aligned with the Paris Agreement.

"This announcement is massive for the domestic banking sector," Morgan Pickett, a bank analyst at Market Forces, said."They're the biggest company on the ASX . The Paris Agreement is a legally binding international treaty signed in 2016 by nearly 200 countries to keep global temperature increases below 1.5 degrees Celsius.

It calculated that it has about $30 billion in home loans exposed to high physical risks like cyclones, floods, and fires. These comprehensive documents outline exactly how a business is going to bring down its emissions in line with what science says is needed to avert the worst effects of climate change.

"Making sure that transition plans are credible will be critical in this piece, and particularly from a 'greenwashing' and a 'greenhushing' perspective," she said. It said its financed emissions for "oil and gas and thermal coal sectors, have reduced by 25 per cent, 30 per cent and 96 per cent respectively, between 2020 and 2023."

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