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Banks Shunning Australian Coal Trigger Parliamentary Inquiry

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Banks Shunning Australian Coal Trigger Parliamentary Inquiry

(Bloomberg) — Australian lawmakers have launched an inquiry into the climate change stance of financial firms and the impact on major fossil fuel exports, after banks, insurers and pension funds began restricting support for coal.

Parliament’s Joint Standing Committee on Trade and Investment Growth will also examine the impact of regulatory guidance that’s warned of the long-term financial risks of climate change.

“Exports from sectors such as agriculture, resources, and defense manufacturing generate billions of dollars for the Australian economy and attract a significant amount of investment,” the committee’s chair George Christensen said in a statement. “If there are changes in the financial services sector which impact on Australia’s exporting industries, particularly those in regional areas, the parliament must take an interest.”

Australia’s Financial Firms Want to Turn Capital Markets Green

Australia’s conservative government, which champions the coal industry and has publicly berated banks for refusing to finance some fossil fuel projects, welcomed the inquiry. Prime Minister Scott Morrison, who once brandished a lump of coal on the floor of parliament to declare his support for the fuel, steadfastly rejects putting a price on carbon and hasn’t committed to net-zero emissions by 2050.

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“It is of great concern to me that a legitimate industry like coal mining, which makes a significant contribution to the national economy and employs thousands of Australians, is being held back by what can only be described as corporate activism,” Resources Minister Keith Pitt said in a statement welcoming the probe.

Australia’s regulators have declared climate change is a financially foreseeable risk that must be mitigated. Several lenders have stopped supporting thermal coal mines and power stations while pension funds favor investing in renewable energy over fossil fuels to aid the transition to a low-carbon economy.

As one of the world’s biggest biggest per-capita polluters, Australia gets almost one third of it’s national income from industries exposed to economic disruption as the world shifts to a low-carbon economy.

©2021 Bloomberg L.P.

Bloomberg.com

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