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The banking sector will face shareholder resolutions calling for a reduction in loans to fossil fuel projects.Credit:Rob Homer

The pressure group on Wednesday filed resolutions ahead of the banks'annual general meetings in November and December,calling for strategies to slash lending and exposure to fossil fuels consistent with the goals of the Paris accord,which commits to keeping global temperatures well below 1.5 degrees above pre-industrial levels.

The Commonwealth Bank,the nation's largest,was spared a similar resolution after committing to exiting the market for lending to the mining of thermal coal – the type of coal used to produce power – and lending to coal-fired power stations by 2030,subject to Australia's energy security.

"Each of the big banks have continued to lend to new fossil fuel projects that are entirely inconsistent with limiting global warming to 1.5 degrees,and banking companies whose business plans rely on the failure of the Paris agreement,"said Julien Vincent,executive director of Market Forces,an arm of Friends of the Earth.

"That's not only exposing themselves and shareholders to increasing levels of climate risk,but undermining our chances of keeping the climate crisis under control."

NAB's reported exposure to coal mining including thermal and metallurgical coal increased 142 per cent to $1.47 billion in the 12 months to March 2019,according to the resolution,which notes that although part of the increase could be attributed to a change in accounting methods,a"significant proportion"represents a rise in direct exposure to the sector.

NAB,in 2017,stopped financing new thermal coal mining projects. The bank on Wednesday said it had been engaging with Market Forces regarding its advocacy and would announce any resolution that meets the relevant requirements to the ASX.

ANZ's exposure to coal mining increased 27 per cent to $1.4 billion in 2018 and another 7 per cent to $1.5 billion in the first half of 2019,the shareholder resolution said.

A spokesman for the bank said its thermal coal exposure had decreased 45 per cent since the Paris agreement was reached in 2016. ANZ's leadership had made it"unequivocally clear"that its thermal coal exposure would significantly reduce over time,he said.

"This decrease in our exposures is consistent with the direction of the Paris agreement and we expect this trend to continue into the future,"the spokesman said.

Westpac's exposure to coal had"fluctuated significantly"in recent years,ranging between $0.58 billion in 2017 and $1.4 billion in 2018,Market Forces said.

A Westpac spokesman said the bank was reviewing the resolution after it was received on Wednesday afternoon.

The Reserve Bank of Australia last week issued a warning that banks and other lenders exposed to carbon-intensive industries such as power generation and mining would face"transition risk"from global warming as sudden regulatory changes could slash the value of assets and businesses,some of which may become economically unviable,referred to as"stranded"assets.

Climate-based resolutions are increasingly being supported by large institutional investors such as multibillion-dollar super funds which consider the impact of global warming as"material"business risk.

Market Forces' campaign targeting the banks drew criticism last month from the $43 billion hospitality super fund Hostplus. The fund's chief investment officer,Sam Sicilia,claimed divesting shares in coal miners"achieves nothing"as other investors would step in and fill the void instead. Pressuring governments to adopt stronger climate policies was a better option,he said.

"Divestment from coal shares does not exclude coal companies from impacting climate change ... someone will still own the coal shares,"he said.

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