Australia's top banks shift focus away from high-carbon lending

Commonwealth Bank of Australia (CBA) has committed to reducing its loan-related emissions to zero by 2030, particularly for thermal coal mining customers . The bank acknowledged the difficulties Australia faces in replacing aging coal-fired power stations with renewable energy. "While the commercial attractiveness of coal-fired power generation is declining, the retirement of some planned coal-fired power plants is being delayed to maintain reliable power on Australia's grid," the CBA said.

Similarly, National Australia Bank NAB, Australia's largest commercial lender , announced that it would no longer provide financing to new thermal coal mining customers or projects. NAB highlighted its commitment to sustainable lending and said it had no corporate loans to thermal coal mining customers as of September 2023 . The bank is also ramping up financing of renewable energy projects and has set multiple decarbonization targets for various industries.

Australia's ruling Labor Party has set an ambitious target of 2030 % of the country 's electricity coming from renewable energy sources, a significant increase from the current 40% .

This policy framework has prompted banks such as CBA and NAB to rethink their lending strategies to focus on supporting the transition to a renewable energy future.