The Commonwealth Bank of Australia (CBA) is walking away from lending to thermal coal mines and coal-fired power stations.

In its recently published annual report, the Melbourne-based bank said, subject to Australia's energy security, that it would quit thermal coal and coal-fired power generation investments by 2030. 

Although the bank currently has in excess of A$500 million (US$340.64 million) in outstanding loans to thermal coal miners, it has lessened its business exposure to coal in recent years.

In her message in the 2019 Annual Report, Chairman Catherine Livingstone said, “To embed our commitment to operating sustainably and responsibly into our business, we have integrated our environmental and social commitments into a new Group Environmental and Social Policy.”

CBA’s new policy includes a commitment to supporting the responsible global transition to net zero emissions by reducing the bank’s exposures to thermal coal mining and coal fired power generation.

The strategy also includes human rights and biodiversity commitments, as well as CBAs approach to lending to customers in the agriculture, fisheries, forestry and defence sectors.

The move by CBA follows commitments made earlier this year from Australian insurers Suncorp and QBE.

The pair announced they will not underwrite any existing thermal coal projects and will stop offering insurance cover for thermal coal mines and coal-fired powered stations by 2030.

Following pressure from environmental groups, the other large Australian lenders ANZ, Westpac and National Australia Bank have also curtailed their lending to the fossil fuel industry.

In its 2018 sustainability review, ANZ pledged to fund and facilitate low carbon and sustainable solutions, lifting its original target of US$10 billion by 2020 to at least US$15 billion.