The “modern” Liberals Andrew Bragg and Tim Wilson have brushed off calls from within the government for a fresh inquiry into banks’ decisions to stop lending to coal companies.
On Wednesday the treasurer, Josh Frydenberg, signed up to a plan put forward by the Liberal National MP George Christensen to launch an inquiry through the trade and investment growth committee to query how climate change is impacting banks’ lending decisions.
The move comes as 29% of ANZ shareholders approved a resolution for the bank to “to reduce exposure to fossil fuels in line with the Paris Agreement’s climate change goals”.
All four major banks have signalled they will align their portfolios to a target of net zero emissions by 2050, with most aiming to cease lending to thermal coal companies by 2030.
The moves have prompted a furious backlash from Nationals MPs who want a new coal-fired power station in north Queensland, with some even calling to boycott banks including ANZ.
Christensen, who has denied the link between climate change and the severity of natural disasters, wants the committee he chairs to set up an inquiry to grill financial regulators – the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority – and banks over plans to pull back on lending or insuring mining projects because of climate change.
Frydenberg reportedly told the Sydney Morning Herald: “It is only appropriate that the parliament be able to examine trends in banking, insurance and superannuation investment practices and how they may affect our resources sector and the regions in which they are based.”
Wilson, who chairs the house economics committee, told Guardian Australia that his committee “explores the legitimate issues of climate and sovereign risk … frequently during our hearings with the banks and regulators”.
“It might be wise to review the house economics transcripts first before starting a new inquiry, but that is a matter for the trade and investment committee,” he said.
Bragg, a senator from New South Wales, told Sky News that environmental, social and governance risk is “a very legitimate measurement and framework for financial institutions to measure long-term risk, including the risk of climate change”.
“That is something we have been supporting as a government,” he said. “Ultimately, though, the judgment banks and financial institutions make on lending is a matter for those institutions.
“Environmental risk is no different from any other sort of risk – it’s an economic risk.”
As the Coalition continues to balance its inner-city liberal constituency with regional voters who are more supportive of fossil fuel industries, Labor has also faced internal struggles about whether it should back a gas-led recovery.
The shadow treasurer, Jim Chalmers, told reporters in Logan that central banks, regulators and financial institutions had done “important work” on “how we manage the financial and investor risk associated with climate change”.
Chalmers said Nationals, including the resources minister, Keith Pitt, and Christensen, lived in an “alternate universe” and disputed the importance of tackling climate change.
“I think it speaks volumes about this treasurer that he places a higher premium on placating the George Christensens of this world rather than engaging properly and rationally in the important work that’s going on to make sure that we can manage financial and investor risk associated with climate change.
“We want to see this inquiry based on facts, not based on conspiracy theories.”
At the ANZ annual general meeting on Wednesday, 29% of investors representing nearly $19bn of investment backed a resolution demanding less exposure to fossil fuels. The number is almost double the 15% achieved for a similar resolution last year.
Despite the Nationals’ anger at banks, environmental activists at Market Forces have accused the big four of taking too long to wind up coal loans and inconsistent efforts subjecting oil and gas to similar scrutiny.
NAB and Westpac are reviewing their approach to funding oil and gas, a move Market Forces wants replicated at ANZ and the Commonwealth Bank.
The Reserve Bank of Australia has said climate change poses a rise to financial stability and has joined central banks in warning that global GDP could fall 25% below the expected level by 2100 if the world does not act to reduce global greenhouse gas emissions.
Apra announced in February it would undertake a climate change financial risk vulnerability assessment of the major banks in 2021.
It estimates that Australia will need to spend about $3.5bn a year to limit damage from climate-related natural disasters, with the cost of responding to them after the fact is likely to be 11 times greater.
