The banks driving sustainable finance in 2020

The banks driving sustainable finance in 2020

Australia is experiencing unprecedented bushfires across multiple states, and there are still two months of the Summer season left. Whilst many organisations have been helping victims and volunteers with donations, the economic and environmental impact is far-reaching.

The economic cost of the fires to the Australian economy has already topped $2 billion, and these fires show no sign of slowing down. Sadly, it’s likely this figure will continue to rise. This estimated cost has been calculated using elements already measured by the government, including income from tourism, retail and agriculture.

However, as Michael Pascoe points out, we seem to be forgetting the wider cost of these fires. “The half-billion animals reportedly killed and the many millions of trees – what were they worth?” Pascoe continues, “Clean water, clean air, sustainable ecosystems – all have massive value, obvious value to most people, but do we price them in our budgeting?”

The simple answer from a governmental perspective is no. As it stands, current accounting methods and standards cannot capture environmental impact. However not all is lost, as organisations lead the charge to reduce greenhouse gas emissions and promote sustainable finance.

In fact, there is a banking initiative in the Australian financial industry that is working to align our finance sector, and follow in the footsteps of the EU’s High Level Expert Group on Sustainable Finance and the UK’s Green Finance Taskforce.

Introducing the Australian Sustainable Finance Initiative (ASFI)

Born from industry discussions at a United Nations Environment Programme Finance Initiative (UNEP FI) event in 2018, the Australian Sustainable Finance Initiative (ASFI) is the first of its kind in Australia.

The ASFI released its first progress report on the 11th December 2019, and has confirmed in this report that it will next produce an interim report, which will form the basis for the Sustainable Finance Roadmap, to be delivered in 2020.

This roadmap is to ensure the financial industry supports greater social, environmental and economic outcomes in Australia. It’s to allow the sector to transition to a more sustainable economy, consistent with global goals including the Paris Agreement on climate change, and the UN Sustainable Development Goals.

Since launch, the initiative has received financial support from Bank Australia, Australian Ethical Investment, Cbus, Insurance Australia Group, QBE Insurance Group, National Australia Bank, ANZ, Commonwealth Bank of Australia and Westpac Banking Corporation.

The ASFI has adopted a collaborative process that is overseen by a Steering Committee of both members and observers. This committee consists of senior financial services, academic and civil society representatives.

Members include the likes of Emma Herd, Investor Group on Climate Change CEO; Sarah Barker, Head of Climate Risk at Minter Ellison; and Dr John Hewson AM, the Chairman at the Business Council for Sustainable Development Australia. Observers feature Eric Usher, Head of the UN Environment Program Finance Initiative; Geoff Summerhayes, Executive Board Member of Australian Prudential Regulation Authority (APRA), and Executive Leaders from the Australian Securities and Investments Commission (ASIC).

Find the full list of steering committee members and observers here.

What is sustainable finance?

The term sustainable means “able to continue over a period of time.” Sustainable finance is about ensuring the financial sector survives the impact of climate change.

The ASFI states that “the health, sustainability and stability of our economy is inextricably linked with the health, sustainability and stability of our people, society and the natural systems on which we all depend.”

By actively realigning the systems that underpin the Australian economy to support the natural ecosystem, the ASFI and other organisations can ensure Australia continues to prosper in the 21st century and the centuries that follow.

Banks start to refuse fossil fuels

Sweden's Central Bank (Riksbank) made headlines late last year when it decided to take action against countries with high Greenhouse Gas (GHG) Emissions.

Australia was one of these countries, and Riksbank sold the bonds it owned from Western Australia and Queensland. It also took a stand against Canada, selling the bonds it owned in the oil-rich province of Alberta.

Goldman Sachs followed suit, not by selling bonds, but by developing and sharing a new environmental policy. A policy that accepted climate change as a scientific fact, and outlined that it would no longer finance new drilling for oil in the Arctic.

Responsible banking in Australia

If you’re looking to reduce your financial carbon footprint, there are many lenders going green in support of eco conscious spending.

Green personal loans are also becoming popular as they help Australians update their homes with solar panels, energy efficient hot water systems or other renewable energy products to reduce GHG emissions.

However, one of the best ways to reduce your carbon footprint is by supporting banks that do not invest in the fossil fuel industry.

Bank Australia, for example, refuses to invest in fossil fuels, intensive animal farming, live exports, gambling, arms or tobacco companies. It also has a Responsible Banking Policy, published online, and the bank is focused on using money customers deposit to support people, community organisations and businesses.

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Learn more about bank accounts

Can foreigners open bank accounts in Australia?

Many Australian lenders allow foreigners to open bank accounts in Australia. Often, this can be done before you arrive in the country – with no Australian address required. When you get to Australia, you can pick up your debit card, using your passport as identification.

Can foreigners open bank account in Australia?

If you’re migrating, studying or working in Australia, you’ll be pleased to know that you can open an Australian bank account. For the most part, opening a bank account in Australia is a simple process which starts by comparing the types of bank accounts foreigners can open in Australia.

Once you’ve found a bank account that suits your needs, you can start the application process.

When you apply for the account, you’ll need to provide proof of ID which may include your passport, overseas ID or credit card. You may also need to provide a copy of your visa and proof of address in Australia.

Depending on the bank and the type of account you choose, you may be able to apply for the account online or over the phone before you arrive in Australia.

How do you open a bank account in Australia?

Opening a bank account in Australia is usually a straightforward process. Some banks give you the option of opening an account online, while others require you to visit a branch.

Different bank accounts offer different features, so it’s best to compare your options to find one that suits you.

All banks require you to pass an identity check to open a bank account. Australia uses the 100-point identification system, which means you’ll need to show a number of forms of ID that, together, add up to 100 points.

Common ID types include a driver’s licence, passport, Australian visa in a foreign passport, and Australian Medicare card. You’ll find out what types of ID are accepted when you go through the sign-up process online or at a branch.

Once your account is open, you’ll be given or sent a debit card that you can use to make purchases and withdraw money from your account.

How do you deposit change into your bank account?

One way to deposit change into your bank account is to visit a branch. Many lenders will also allow you to deposit your change through one of their ATMs.

How do you transfer money from PayPal to a bank account?

Transferring money from PayPal to an Australian bank account is simple. Just follow these three steps:

  • Go to your Wallet
  • Click ‘Transfer Money’
  • Follow the instructions

The money will take three to seven business days to reach your bank account.

Once you’ve made the transfer request, it can’t be withdrawn.

How do you set up a bank account online?

Once you’ve compared bank accounts and found the right one, the process of opening a bank account online is quite simple and can be done in around 10 minutes.

To set up a bank account online, you’ll need to prove your identity and provide an approved form of ID as well as your tax file number (TFN).

If you’re a new customer of the bank, you’ll need to verify your identity and potentially upload documents before you can complete your online application.

Once your ID has been verified and you’ve set up your bank account online, you should receive your bank cards in the mail along with your PIN and any other account details.

Do I need to open a business bank account?

Just because you’re in business doesn’t necessarily mean you need a business bank account. You could be a sole trader not registered for GST, and use your personal bank account for business.

If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.

There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.

Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

It’s up to you whether your priority is mainly transactions, or earning the maximum amount of interest on your principal. There’s a business banking solution for you if you need one.

Can a debt collector garnish my bank account?

A debt collector can garnish your bank account, but only with a court order. This drastic action is usually taken only if you’ve ignored several notices asking you to pay the debt.

If this happens, there is nothing you can do to stop it other than immediately pay back your what you owe in full or make arrangements to pay it off in installments.

Once a garnishee order is issued, your bank will put a freeze on your account as it processes the order. This usually takes two to three days and you won’t be able to access any of your money during this time.

If you have Centrelink payments, they may be protected, depending on what the court order says.

Are bank accounts frozen when someone dies?

Yes, Australian bank accounts are frozen when someone dies. If you want to close the account of somebody who has died, you might have to provide proof of death and a copy of the will. You might also have to prove your relationship to the deceased person.

If you have a joint bank account with somebody who has died, you will generally be entitled to all the money in the account. Again, you might have to provide proof of death if you want to change the bank account from a joint account to a one-person account.

How can I close a Commonwealth Bank account?

You can close your Commonwealth Bank account at any branch, provided you have appropriate identification. You can also close your account over the phone, by calling 132 221, 24 hours a day.

How do I open a bank account for a child?

There are few better ways for a child to learn about money management than through savings. And there’s a plethora of bank accounts designed specifically for young people and children.

A bank account for a child can be opened online, over the phone or in a branch in a few easy steps. The minimum age a child can open a bank account for themselves usually ranges between 12 and 14.

If the child is too young to open the account, you can do it for them as their legal parent or guardian. 

To do this, you would need to be over 18, have an Australian residential address and currently reside in Australia (or have proof of residency).

You would also need to provide:

  • Identification for yourself and the child
  • Your tax file number (TFN) or TFN exemption

Depending on the bank account, you might be able to choose what level of access the child has to their bank account (online and via the phone).

How can I wire money to a bank account?

You can wire money to an Australian bank account either through your own bank or by using a money transfer company such as Western Union or MoneyGram. Either way, you’ll need the other person’s name, BSB number and account number. If you use a money transfer company, you might also need to provide the recipient’s address for large payments.

Can I close my bank account over the phone?

In most cases, you can close a personal or business bank account over the phone. In fact, this is the best way to ensure you’ve closed an account properly.

By speaking to a banking representative, you can capture and close out any pending transactions, or interest owing/payable on the account being closed.

In the instance where the account is a joint account, or you have multiple bank accounts you want to close, your bank may send you a form that you need to fill out and return.

Either way, you would be advised over the phone of the steps you need to take. Calling your bank ahead of closing an account is often a smart course of action.

Can I open a bank account in another country?

Despite having a bad rap for facilitating tax evasion, it is possible and legal to open a bank account in another country, also known as an ‘offshore account’.

Some people choose to open a bank account in another country to invest overseas, for higher interest-earning potential or to access foreign banking services.

The process for opening an offshore bank account differs depending on the financial institution and country in which you’re opening the account.

Typically, you will need to provide identification such as a passport, a local bank statement and a signed declaration proving the source of the money being used to open your account. Usually, deposits into offshore accounts can be made by international money transfer.