By Kyle Robertson, Head of Research, Market Forces.
People across Asia and Australia are experiencing another scorching season of deadly and terrifying wildfires, heatwaves and floods. The world has just endured the three hottest years on record according to the World Meteorological Society and millions of people are feeling the brutal brunt of worsening impacts of the climate crisis. But some of our biggest banks and pension funds are failing us all by pouring money into new coal, oil and gas, fuelling catastrophic climate disasters.
Climate change is wreaking havoc, driving up the cost of living in all walks of life, from the cities to the most remote communities. Insurance premiums are surging due to the growing frequency and intensity of unnatural disasters. A growing number of homes and properties are becoming uninsurable, with more than one in seven (15%) Australian households experiencing insurance affordability stress in 2024.
In 2025, the total worldwide cost of damages caused by extreme weather disasters has been calculated at US$224 billion, of which less than half was insured, according to the global reinsurance company Munich Re.
Yet as evermore ferocious climate catastrophes batter communities across the Asia Pacific region, some of our largest financial institutions are propping up the very activities fuelling these disasters, all while passing the costs onto people enduring a cost of living crisis.
Big banks and pension funds have continued this appalling behaviour despite their public commitments to honour the climate goals of the Paris Agreement, which requires cutting support for new fossil fuels and accelerating cleaner and cheaper renewable energy.
When the world signed the Paris Agreement over a decade ago, it was agreed that limiting the worst effects of global warming required deep cuts to greenhouse gas emissions. Scientists and expert bodies, including the International Energy Agency and the Intergovernmental Panel on Climate Change, confirmed that the single largest source of emissions – fossil fuel production – would need to be reduced rapidly.
Instead, it’s gone the other way. According to projections from the Global Carbon Budget, global fossil fuel emissions are forecast to set another all-time record in 2025, enabled by big banks and major investors. .
According to the International Energy Agency, fossil fuel companies have poured over US$11.4 trillion globally into coal, oil and gas in the last decade. In 2024, the world’s annual average temperature surpassed a 1.5°C increase above the pre-industrial period for the first time ever.
Let’s make no mistake, we are looking down the barrel of catastrophic warming levels of just below 3°C this century unless we speed up the transition from fossil fuels to clean energy. At least 800 million people face being displaced due to rising sea levels and flooding. Longer deadly heatwaves are forecast to affect everyone on earth by 2050.
It’s beyond belief that major Australian banks, particularly ANZ and Westpac continue to fund the fossil fuel expansion plans of some of the world’s biggest polluters like Woodside, Santos, and BP. Japan’s biggest banks including MUFG, SMBC Group and Mizuho, continue to rank among the world’s top financiers of coal, oil and gas expansion.
Macquarie Group is backing one of Australia’s biggest new gas fracking projects, the Northern Territory’s Beetaloo Basin, threatening clean water supplies for First Nations and farmers and unleashing emissions equivalent to running Australia’s biggest coal power station, Eraring, into next century.
These banks parrot the gas industry claims that more of their fossil fuel is needed for the transition to clean energy. But there is no need for the development of new gas supplies to meet demand in the Asia Pacific according to the Institute for Energy Economics and Financial Analysis. Put simply, there is enough gas already in production and under construction.
Australia and Japan’s largest pension funds are also failing to protect us from the ravages of climate change now and into the future. The top 30 Australian funds have US$21.6 billion invested in the 200 companies with the biggest fossil fuel expansion plans in the world, more than three times their investments in major clean energy companies. Japan’s five biggest investors held even more than that – at US$40.6 billion as of June 2025.
Pension funds have a duty to act in the best financial interests of their members, but they’re fuelling catastrophic fires, floods and other disasters, and risking a safe and prosperous retirement by failing to rein in major climate polluters.
It’s time our financial institutions heed the emergency alarms and stop funding and enabling fossil fuel expansion. Especially as the mounting social, environmental and financial costs are passed on to all of us.