Banks should be forced to provide services to all “law-abiding businesses”, including export industries such as coal and live animal exports, a parliamentary inquiry has concluded.
The inquiry, chaired by Nationals MP George Christensen, also called for treasury to examine “activist pressure” on banks in relation to lending to the resources industry and “if necessary develop options to address this issue”.
Labor and the Greens have rejected the conclusions of the inquiry, saying incoherent climate policy, not banks, is to blame for job losses.
The trade and investment standing committee report, tabled on Friday, is a mixed bag: on the one hand demanding regulators consult the resources sector more on climate change risk guidance, while on the other recognising net zero emissions will create investment opportunities.
The report reflects the diversity of its members’ views, from Christensen, a fierce critic of financial institutions for their refusal to lend to resource projects, to Liberal MP Katie Allen, a proponent of net zero emissions.
Banks had told the inquiry they needed to actively manage climate risk because governments and regulators required it, and because the investor community was “increasingly transitioning its focus towards a net zero emissions economy”.
In his foreword, Christensen claimed that climate risk was “ill-defined” and amounted to “a veneer” for decisions made by “political and public relations considerations”.
“The committee was concerned to learn that profitable and law-abiding companies in some of the country’s main export sectors – predominantly coal but also live animal exports – face the threat of losing access to essential services such as transactional banking, finance and appropriately priced insurance,” he said.
Christensen accused companies of “thinly veiled corporate wokery”, bowing to “bad press” and “minority but noisy shareholder activism”.
The majority report of Coalition MPs urges the government ensure “at a minimum” that banks provide transactional banking services to law-abiding businesses, a wide-ranging recommendation that could also benefit sex workers and gun shops refused banking services.
It recommends the government “direct the banks to prepare a regulatory impact statement that outlines the real impacts of a policy setting … such as job losses and economic impacts, and detailing industry feedback … before withdrawing funding from any export project”.
The inquiry asked the government to consider laws requiring shareholders to be consulted before decisions “to withdraw funding from export-focused projects”.
It asked government to work with the resources industry to “create a self-funding insurance model”, which the Greens labelled “oxymoronic” and warned could lead to taxpayers being on the hook to underwrite such a scheme.
In addition to the treasury review of activist pressure, the inquiry called for the Australian Competition and Consumer Commission to investigate whether refusing loans or insurance to the resources industry breaches competition law, which bans companies from acting “in concert”.
The government should then “consider options to ensure that viable, profitable and lawful businesses can access reasonably priced finance and insurance services”, it said.
On Thursday the reserve bank labelled climate change a “systemic risk” for the financial sector, a fact that tends to suggest banks are responding to the same imperative to mitigate risk rather than acting in an anti-competitive fashion.
In their dissenting report, Labor MPs and senators said the recommendations would “impose a substantial material risk to the Australian economy”, warning of increased costs of insurance, business loans and even residential mortgages.
The Labor report said the finance sector was anticipating lower coal export prices and volumes in the future and the “widely recognised” risks of climate change itself.
In a separate dissenting report, Greens senator Dorinda Cox said the inquiry was a “barely concealed PR campaign for the fossil fuel industry”.
Cox said the inquiry was premised on the idea “regulators and banks are not making a rational assessment of the threat posed by the climate emergency … [that] those whose job it is to assess risk by the trillions have all got it wrong”.
The move to blame “activists” ignored “the fact that the global transition to net zero is already under way whether the Morrison government likes it or not”, she said.