Westpac has faced questions from a Liberal MP over whether its decision to stop underwriting thermal coal mining by 2030 was a “PR stunt” that was actively harming the national interest.
Craig Kelly pondered whether China – being one of the world’s largest importers of coal – would consider stepping in where Westpac was no longer financing thermal coal and questioned whether the bank had an obligation to “act in the national interest”.
“There are deep global capital pools and there are other options for these providers and we need to manage our business for climate risk and what our regulator asks,” said Westpac CEO Peter King.
Mr Kelly (a prominent climate change denier) also questioned whether Westpac’s decision was a “PR stunt” that would have no impact on Australia’s ability to export thermal coal due to its small exposure to the industry – something that Mr King denied.
“We’ve said that we want to get net emissions down by 2050,” Mr King said. “If I look at the sectors that drive some of that, agriculture, mining, particularly thermal coal, are the ones that we need to focus on to reduce emissions.”
Mr King said they would work on transition options with agriculture and airlines, and that while Westpac was working with the thermal coal sector to offset emissions they “can’t see the plans”. Mr Kelly questioned whether Westpac’s stance was inconsistent given its move to “draw a line” under thermal coal financing while collaborating with other large polluters.
“I understand the feedback, but that’s how we’ve thought about the policy,” Mr King said.
Mr Kelly also imagined a scenario where Australian coal companies were forced to close down in the absence of Westpac financing, leading China and India to start producing their own, lower-quality coal that would lead to higher emissions.
Mr Kelly has previously been a vocal critic of APRA’s directive that regulated entities should devote more of their focus to climate change, questioning why the prudential regulator had a dedicated position for climate risk and not pandemic risk.
“You’ve made specific requirements for your APRA-regulated entities to make provisions and comments on climate risk, but you’ve done nothing on pandemic risk,” Mr Kelly said in August.
“It seems to me you’ve dropped the ball completely and you’ve been overly focusing on climate when you haven’t been focusing on pandemics.”
APRA has previously released guidance on pandemic risk.
The FSC has signalled some of the largest global fund managers are seeing excessive red tape in Australia as an issue, as it implores the go...