While the political debate about a global treaty and a price on carbon continues to rage, the campaign for climate action is refusing to take ‘maybe’ for an answer. Increasingly, campaign groups around the world are targetting the money behind pollution to try to stop a new generation of polluting energy infrastructure from being financed and built.
Earlier this year, Greenpeace compiled a list of 12 new coal power stations proposed for around Australia. There has been a vague hope in policy circles that these plants wouldn’t be built because of the impending carbon price, but the proponents of these plants are pressing on regardless. The western Australian Government approved Bluewaters 3&4 and Coolimba power stations earlier this year, as well as the refurbishment of the antiquated Muja A&B power stations. In NSW, the Government approved concept plans for two massive new coal plants and has now approved the reconstruction of Munmorah power station which was due to close in 2014. And the Victorian EPA is now considering final works approval for the new HRL brown coal power station in the Latrobe Valley.
The big question is whether these plants can get finance. And if so, who will provide it?
Greenpeace commissioned economic research group Profundo to compile an analysis of the financing of the coal sector in Australia. What the research shows is that the big four retail banks – ANZ, Commonwealth, NAB and Westpac – are the largest financiers of the coal industry in Australia. Over the past five years, these banks have invested over $5billion into coal infrastructure, more than six times as much as they have invested into renewable energy. These are the same banks that consistently win sustainability awards and put pictures of windmills on their corporate reports.
ANZ emerges as the worst, with over $1.6billion of coal financing over the last five years, making them the largest financier of coal power stations and coal mines. They acted as lead arranger of finance for the most recent coal power station to be built in Australia – Bluewaters 2 in Western Australia, which was comissioned late in 2009. Interestingly, the financing of Bluewaters 2 was completed in 2007, at a time when both major political parties were committed to implementing a price on carbon.
None of the big four banks have ruled out providing finance to new coal power stations, but doing so would expose them to significant reputation risk – not to mention the financial risks associated with coal in a carbon constrained world. ANZ is particularly exposed in terms of it’s corporate reputation. They have topped the Dow Jones Sustainability Index for four years running and have made a commitment to go ‘carbon neutral’. Their new head office in Melbourne is a 6 star green building with windmills on top. This green positioning is in stark contrast to their role as the number one financier of pollution.
Since the climate issue became mainstream in 2006, the focus of activist groups has been on political action rather than corporate action. Some companies have positioned themselves as part of solution to climate change, while others have simply adopted the rhetoric of change. But as the climate debate continues to mature, there will be less room for green posturing by corporates, and much greater scrutiny by both the public and by staff who are still demanding action on climate change.