👉 Background: The Big 4 banks in Australia are some of the biggest banks in the whole wide world. They lend to almost everyone - from prospective homeowners looking to get into their first home to businesses looking to expand their empires.

👉 What happened: Back in 2022, CommBank, ANZ, Westpac and NAB, lent $43.4 billion to fossil fuel businesses. But more recently, activist groups and investors have been piling on the pressure to stop lending to fossil fuel companies. And, it seems to be working. In 2024, the Big Four banks lent $34 billion to fossil fuel companies in 2024 — or nearly $10 billion less.

👉 What else: On top of that, the Big Four banks are pushing fossil fuel companies to create climate transition plans if they want to be eligible for future financing. And if they don’t see legit transition plans by specific dates in 2025, it means no more lending.

What's the key learning?

💡Banks are being forced to balance commercial interests with the need to address climate risks. On the one hand, banks and all for-profit companies, need to focus on maximising shareholder value. But on the other hand, they also need to maximise profits… ethically.

💡Many ESG-conscious investors believe that fossil fuel lending isn't just bad for the climate, but also bad for business. And clearly the pressure has worked, with lending to fossil fuel companies dropping by 22% over the past two years.

💡The Australian banks aren’t the only companies being pressured by activist investors. Back in 2021, a small activist investor group called Engine No.1 won three seats on the ExxonMobil board, booting off the old board members and started to push for some changes from within.