Westpac tightens credit criteria for oil and gas borrowers
Westpac tightens credit criteria for oil and gas borrowers
04 May 2021 3:48AM
Westpac has tightened lending standards for borrowers in the oil and gas sector as part of its commitment to lowering greenhouse emissions.
Under a revised policy revealed in the first half profit presentation, the bank says it will no longer accept loan applications from new borrowers in the oil and gas sector unless they can show their operations are aligned with reducing emissions set by the Paris Agreement.
Westpac is one of the first banks in the world to implement such a requirement and says it is working with existing oil and gas borrowers to bring their businesses into line with the Paris targets.
3 May 2021
Westpac has told oil and gas producers it will no longer accept them as new customers unless they have clear, publicly-documented strategies to align their activities with the Paris climate goals.
It follows similar announcement by the Commonwealth Bank of Australia, and signals the banking and finance industry is now turning its attention away from thermal coal – which most of the big banks have already said they will stop funding – to two other main causes of global warming.
Westpac said its decision, which appeared with no fanfare on page 52 of its half-year results on Monday, was an entirely financial one, based on the “transition risk” of climate change. All the big banks have framed their existing coal screening policies in similar terms, as financial rather than environmental or moral decisions.