But she said: "This definitely puts [ANZ] in a stronger position than the other banks in terms of articulating what they are doing about these issues." ANZ will continue to lend to the coal industry but will only back new coal-fired power plants if their carbon dioxide emissions are below 800 kilograms per megawatt hour, the maximum for the latest coal generation technology. It will not lend to existing coal plants – some of which emit more than 1100-1200 kilograms CO2 per megawatt hour – to extend their lifetimes unless the owner has a strong plan to significantly reduce emissions by a fixed deadline and move towards best practice. Greg Evans, executive director – coal at the Minerals Council of Australia, said two-fifths of installed coal generation in Asia already used cleaner technology, much more was being built, and this was good for Australia, which supplied the most suitable high-quality coal for these plants. "It's good to see a significant financial institution taking account of the advances in technology and recognising the substantial reduction in emissions under way in coal-fired generation," Mr Evans said. ANZ's move is in response to mounting global pressure to reduce exposures to CO2 emissions ahead of the United Nations climate change talks in Paris in December. Last week Bank of England Governor Mark Carney warned that financial institutions faced "potentially huge" losses from climate change action that could leave vast reserves of oil, coal and gas "stranded". ANZ global head of Credit & Capital Management Kevin Corbally, said: "You are probably going to see a new global agreement coming out. There's going to be limits on greenhouse gas emissions. "We want to be in a position where we can actively support the commitment made by governments and also work actively with our clients as well." The lending pledge commits ANZ to fund $10 billion over five years for emissions reductions undertaken by customers, such as boosting energy efficiency, low emissions transport, "green buildings", reforestation, renewable energy and battery storage, emerging technologies such as carbon capture and storage, and climate change adaptation. "Our revised policies, rules and standards reflect that today, coal provides around 40 per cent of the world's electricity needs," Mr Corbally said in an email to senior managers on Monday. "Credible global future energy scenarios including the International Energy Agency forecast that coal will continue to comprise a significant share of the energy mix in the short to medium term," the email says. "This means we will continue to support our natural resources and energy customers during the transition, provided they meet our new, tougher lending policies and standards." Climate Institute deputy chief executive Erwin Jackson said: "We are seeing the mainstreaming in Australian business and globally of the recognition that we need to get to net zero emissions this century if we are serious about the 2 degree goal." ANZ has one of the largest exposures of the big four Australian banks to the fossil fuels industry – about $12 billion, just under $3 billion of which is in direct coal mining. Coal-fired power has the highest CO2 emissions of any widely used fuel and some mainstream environmental NGOs are pressing investors to make a decisive break with the fuel. ANZ isn't going that far – this year it joined in the funding of Whitehaven Coal's controversial Maules Creek coal mine in northwestern NSW. "I think it's the first time any of the big banks have come out that strongly and said, 'yes, climate change is happening', and 'yes, we are going to change our activities to be consistent with 2 degrees'," said Lyndon Schneider, national director of the Wilderness Society. "They have recognised the scale of the problem but they are still lending to Whitehaven Coal, they are still lending to Santos, and these are the institutions we have been campaigning against over the last 18 to 24 months because they are opening up new fossil fuel fields. This issue is not going to go away and we'd hope that the bank would continue to review it over the next two to three years because continuing to lend to fossil fuel companies is not going to get us to 2 degrees." Mr Corbally said ANZ had consulted widely on its policy. "We are confident that the measures that we have come up with strike the right balance because we're keen to continue to support the customers that we have got, the communities that they also operate in, but at the same time we are conscious of addressing what is the challenge effectively of climate change," he said.
Following on from Citigroup's announcement yesterday, ANZ bank has also now pledged not to finance traditional coal mining projects, and says it will provide at least $10bn in funding towards renewable energy, reforestation, low-emissions transport, and carbon capture and storage (CCS)﻿. This is seen as the most significant step by more than 1100-1200 of Australia's big banks on climate change, and follows accusations by climate activists over the bank's original position as Australia's largest lender to fossil fuel projects, especially after it backed the controversial Maules Creek mine in New South Wales.