Commonwealth Bank says Australia is well positioned to capture the many opportunities of transitioning to a net zero emissions economy but this will require investment of up to $3 trillion by 2050.
The country's biggest lender on Wednesday released its latest Climate Report for 2022 outlining its progress in financed emissions targets for four priority sectors consistent with limiting global warming to 1.5C.
"Our estimate is Australia's transition to a net zero emissions economy will require $2.5 trillion-$3 trillion of investment to 2050," chief executive Matt Comyn said in the report.
"While ambitious, this is similar in scale to the investment in Australia's mining boom from 2005-2015."
The lender has been undertaking climate scenario analysis since 2018 and says it has now aligned sector-level financed emissions targets to a 1.5 degree temperature increase ambition, as part of its commitment under the Net Zero Banking Alliance (NZBA) formed on the sidelines of last year's COP26 climate conference.
CBA plans to target the most emissions-intensive sectors first and set interim targets over the next 12 months, in line with NZBA guidelines.
These include the energy, property, agriculture and transport sectors.
"We are progressively setting sector-level targets on our financed emissions. By 2025, we intend to have targets on sectors that account for more than 75 per cent of our 2020 financed emissions," the bank said in the report.
Despite that encouraging outlook, CBA's plans were heavily criticised by climate activists.
Climate activist organisation 350.org called the bank's new 2030 fossil fuel lending targets "just smoke and mirrors".
"CommBank's latest climate report is heavy on greenwash, but allows billions of dollars in loans in coming decades to open new fossil fuel reserves, which we know will drive dangerous climate impacts like floods, bushfires, and drought," 350.org's campaign director Kelly Albion said in a statement.
Environmental finance campaigner Market Forces also said while CBA's new targets fall short of aligning to a 1.5 degrees global warming limit, a more pressing concern is the bank's ongoing willingness to finance companies and projects expanding the scale of fossil fuels.
It plans to introduce a shareholder resolution at CBA's upcoming annual general meeting calling on the bank to demonstrate how its financing will not be used for new or expanded fossil fuel projects.
