The National Australia Bank (NAB) has opted to stop extending financial support to future thermal coal mining operations.
According to the banking institution, the decision is intended to ensure an orderly transition to a low-carbon economy.
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However, NAB will continue to support its existing customers across the mining and energy sectors, including those with existing coal assets.
In a statement, NAB said: “An orderly approach to the low-carbon transition is critical to ensure Australians can continue to have access to secure, reliable and affordable energy and support our economy.”
Last month, Commonwealth Bank indicated to its shareholders that there would be a likely decline in its financial support for the coal industry.
Welcoming NAB’s decision, Greenpeace campaigner Jonathan Moylan said: “This is a market-leading position for an Australian bank and is even stronger than the position taken by Commonwealth Bank last month because it is formal policy.”
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By GlobalData“All over the world, financial institutions are turning their backs on coal after realising its contribution to climate change and the damage it does to the health of communities and the planet.”
The decision comes at a time when companies worldwide from several industries are taking steps to ensure the rise in temperate is limited to 1.5°C, in accordance with the Paris agreement.
Earlier this month, Dutch multinational banking and financial services firm ING revealed its policy initiative to nearly eliminate exposure to coal power generation by 2025.
The firm will stop funding utility companies that are dependent on coal for more than 5% of their energy.
In 2015, Rio Tinto chose to extend its greenhouse gas emissions reduction programme to 2020.
