SYDNEY (BLOOMBERG) - Australia's biggest banks are expanding their sustainable finance teams even as they struggle to find talent in the fast-changing sector.
Commonwealth Bank of Australia has doubled the size of its sustainable division, while Australia & New Zealand Banking Group has boosted its group to 14 people, with more hires on the way.
The nation's top lenders are finding it hard to recruit staff with the right skills set that combines banking experience with knowledge of environmental, social and governance issues, bankers at a Bloomberg webinar on sustainable finance said on Tuesday (April 20) in Sydney.
"The challenge is to find people with the right experience," said David Jenkins, global head of sustainable finance at the corporate and institutional unit of National Australia Bank. "It's happening so quickly, it's almost a full-time job keeping up."
As the asset class grows and evolves, demand for sustainability-linked bonds will soar, said Tessa Dann, a director on the sustainable finance team at ANZ. Dann said these bonds are forward looking in setting a pathway to meet sustainability targets, a key difference with green bonds that are backward looking.
While the sector is small in the sustainable finance world - about US$30 billion (S$40 billion) has been issued - it will "take off" as appetite from clients is "really significant", she said, adding Australia will likely see its first such bond this year.
Investors meanwhile are asking tougher questions as they consider buying into the ever-increasing supply of ESG-linked debt, Jenkins said. Investors want to know what projects are being financed, how the metrics will be measured and whether there is any social impact.
"The bar is rising all the time," he said.
International pressure is mounting on Australia, one of the world's biggest fossil fuel exporters and per-capita emitters. The nation is generally considered a climate laggard, even as some of its biggest markets - China, Japan and South Korea - express increased ambition to combat climate change.
Prime Minister Scott Morrison confirmed he will attend President Joe Biden's climate summit this week, as pressure mounts on his coal-industry backing government to commit to a hard target for net-zero emissions.
Morrison again ruled out taxes for polluters, and backed the country's top emitters such as AGL Energy and mining giants Rio Tinto Group and BHP Group, which he name-checked in the speech - to come up with the solutions to help Australia hit net zero.
Banks globally are facing pressure from investors to curb lending to fossil-fuel companies and to throw their weight behind the goals of the Paris Climate Agreement.
Asset managers running US$11 trillion, including Federated Hermes's EOS division and Pacific Investment Management, have asked 27 banks to commit to eliminating emissions across their operations by 2050, including those generated from lending, trading and underwriting.
The group of 35 investors, which was convened by the Institutional Investors Group on Climate Change, also said the banks should expand their green finance activities and withdraw from any projects that are at odds with the Paris accord.
Siobhan Toohill, group head of sustainability at Westpac Banking had a simple suggestion to cut through the political noise around climate change in Australia.
"Simply have to get on with it," she said.