In a move to tighten new lending standards, the bank said it would “only consider directly financing new greenfield oil and gas projects that are in accordance with the International Energy Agency’s Net Zero by 2050 scenario or where the Australian or New Zealand Government or regulator determines that supply from the asset is necessary for national energy security.”
Westpac will give its existing oil and gas customers until 2025 to put in place “credible” transition plans, agreeing to continue corporate lending and work with customers to put these plans in place.
The bank also defined the emissions intensity for power generation, saying 79 per cent of its lending to the sector was directed at renewable energy. Westpac included the hard to abate cement production industry in its first round of targets, due to the emissions intensity of the manufacturing process.
“Our target is designed to allow financing for the sector to continue while the sector transitions to new technologies to reduce the release of carbon dioxide in the manufacturing process,” Westpac said.
Westpac said it would publish its full net zero transition plan within 12 months of setting targets.