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Supporting the climate transition

The Australian Banking Association supports the goals of the Paris Agreement. We also support accelerating the reduction of emissions by 2030 and a balanced and orderly transition to a net zero emissions economy by 2050.

The industry accepts its collective role in supporting the Australian economy’s shift to a low carbon future. Our ambition is to enable and empower our customers to successfully transition.​ Australia’s banks are already supporting a balanced and orderly transition through the provision of climate-related products and services, whether it be a transition to new lower carbon technologies or helping our customers to build climate resilience into their businesses or homes. Collectively, the industry has committed to providing over $135 billion by 2025 to finance sustainable initiatives.

As a member of the International Banking Federation (IBFed), the ABA endorses the IBFed letter to the G20 Finance Ministers and Central Bank Governors. We will take into account the stated priorities on climate change and will work to establish alignment throughout the industry on how we consider and disclose climate-related risks and opportunities for the Australian banking sector, and for the Australian context, in a way that supports the Australian economy more broadly. ​

Around the world, companies are moving to improve reporting on their management of climate-related risks and opportunities for their shareholders and other stakeholders to make more informed decisions. ABA member banks are doing their part. Many were early adopters of the Finance Stability Board’s Taskforce on Climate-Related Financial Disclosure recommendations (TCFD). By supporting this initiative, the banking industry has signalled we will be seeking government support for greater transparency and disclosure of climate-related information and transition plans of our customers. Additionally, governments around the world are developing sustainable finance taxonomies which identify green economic activity, thereby enabling the efficient financing of the low carbon transition. The ABA supports any action of the Council of Financial Regulators to introduce a globally aligned taxonomy that also accounts for the Australian context. ​

Our members are committed to reducing their operational carbon footprint, that is scope 1 and scope 2 emissions. Many of our members have also committed to, or are examining, reductions in their material scope 3 emissions associated with Bank’s supply chains (excluding financed emissions). Some ABA members achieved carbon neutrality of their operations more than a decade ago and the industry as a whole will aim to achieve operational carbon neutrality by 2030 or sooner. We will seek to do so by continuing to reduce absolute operational emissions, using carbon offsets for residual emissions only. Further, the industry commits to accessing its electricity requirements from equivalent to 100 per cent renewable sources by no later than 2030, although many Australian banks will achieve this target by 2025. 

International Banking Federation (IBFed) priorities on climate change

The ABA is a member of the International Banking Federation (IBFed) who published a letter sharing its views on climate change ahead of the G20 Summit and the UN Climate Change Conference (COP 26) . The letter covers the following topics:

  • Banks have a key role to play in financing a balanced and orderly transition
  • Global standard setters have an important role in sharing information and harmonising standards and approaches
  • For international standards to be effective and consistent, international governance must be streamlined
  • Data challenges must be addressed
  • Research and consultation are key in developing effective standards

The letter can be viewed here

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