The following is an extract from an article which was published in the Sydney Morning Herald in July 2017 which highlighted moves by the banking sector to reduce their financing of the coal industry:

Big four banks slash lending to coal miners

Australia's big banks have slammed the brakes on project finance lending to expand the coal industry since late 2015, but are still lending billions for other fossil fuel developments, environmental finance group Market Forces says.

ANZ and Commonwealth Bank, previously named as the largest lenders to fossil fuels, both signalled they were actively reducing loans to some carbon-intensive sectors including the coal industry, with CBA linking this to the Paris climate change agreement in 2015.

Westpac and National Australia Bank have also toughened their stance on lending to coal mining recently, as all four banks are targeted by environmental groups.

Corporate and project finance lending by the big four to coal has more than halved from $3.1 billion in 2015, to $1.4 billion in 2016, and just $99 million in the first half of 2017.

Banks disclose their carbon exposure differently to this, but lenders confirmed they were running down exposure to the coal industry.

A Commonwealth Bank spokesman named many factors that went into a loan decision, but indicated its Paris commitment was one reason for the downturn in coal lending.

In keeping with our commitment to the Paris accord, our actual direct exposure to coal mining has declined and our support for gas as a transition fuel, and for renewables, have increased," a spokesman said.

An ANZ spokesman said "active portfolio management" was one reason its lending to the most carbon-intensive industries had fallen 10 per cent in 2016.

The bank's total coal mining exposure is 0.16 per cent of all loans, and has halved from $2.8 billion to $1.4 billion in the last three years, he said.

Westpac chief executive Brian Hartzer referred to the bank's recent policy change to rule out new lending in previously undeveloped coal basins, or for coal with low energy content.

"Westpac recognises that climate change is an economic issue as well as an environmental issue, and banks have an important role to play in assisting the Australian economy to transition to a net-zero emissions economy," Mr Hartzer said.

CBA said: "It is the mix of energy sources that over time will assist with the transition to a net-zero emissions economy and realising the Paris goal of limiting temperature increases to well below two degrees."

National Australia Bank spokeswoman referred to the bank's 2015 commitment to lend $18 billion in "environmental financing" by 2022. She said $11.76 billion of this had so far been delivered.

"NAB continues to support the energy sector and is committed to playing an active role in the orderly transition to a low-carbon economy to ensure Australians can have continued access to secure, reliable and affordable energy and support our economy," she said.

Required

Evaluate and explain the moves by the banking sector to reduce their financing of the coal industry from the: (a) social contract perspective of legitimacy theory; and (b) the managerial branch of stakeholder theory