Banks are increasingly aware of the need to report on and reduce emissions associated with their operations, investments, products and services. To date, 130 banks from 49 countries, including Australia, have signed The Principles for Responsible Banking to align their business strategies with the goals of the Paris Climate Agreement. Together, these companies own US$47 trillion in assets.
This report assesses emissions reduction commitments and activities to evaluate the Australian banking sector’s alignment with achieving net zero emissions by 2050. It focuses on Australia’s 20 largest banks, based on the total value of their Australian assets. These 20 organisations include banks with the highest reported emissions in Australia.
Banks influence emissions in two ways: directly through their operations, such as energy use in offices and branches; and indirectly through their investments, products and services. In terms of climate change impact, the banking sector’s operational emissions are insignificant compared to the emissions associated with the activities that banks finance, for example through personal and corporate loans, mortgages and investments in fossil fuel extraction, energy generation and real estate. These emissions are often referred to as portfolio or financed emissions.
Of the 20 banks assessed, nine were found to have a net zero before 2050 target for their operational emissions, but none have a comprehensive net zero emissions target that includes both their operational and portfolio emissions.