Australia’s Macquarie bank to exit coal by 2024

Australia’s investment bank Macquarie Group said on Friday it will stop financing coal projects by 2024, adding to a long list of local financial institutions that have withdrawn their support for the polluting commodity.

The Sydney-based bank’s exposure to coal is small and shrinking. The coal sector accounted for just A$100 million (US$77.8 million) in the financial year that ended on March 31, about half of what it was the previous year.

Chief executive officer Shemara Wikramanayake said coal had never been a large focus for the group, but in a rather conflicting statement, she noted the bank would remain committed to the oil and gas sector until new technologies are developed.

The plan, she said, is to fully divest any remaining interest in the sector within three years.

Banks across the globe are bowing to pressure from shareholders and lobby groups to avoid coal investments. Australia and New Zealand Banking Group (ANZ Bank), Commonwealth Bank of Australia and Westpac, three of the nation’s top four banks, have recently signaled their intention to stop coal financing.

The growing trend has left miners scrambling to source alternative funds for projects.

Yet, fossil fuel companies are worth US$18 trillion in listed equity, making up a quarter of the total value of global equity markets, according to Carbon Tracker’s most recent estimate. They account for US$8 trillion of corporate bonds, more than half the non-financial corporate bond market.

Unlisted debt — mostly owed to banks — could be four times greater, reaching almost $32 trillion, the London-based think tank suggests.