Westpac's commitment to help limit global warming to less than two degrees Celsius doesn't mean it's going to stop investing in coal projects any time soon.
Australia's oldest bank has agreed to judge lending proposals according to how they conform to the UN's climate change target of restricting global temperatures, but won't rule out investment in individual sectors.
"It's very hard to see how scientists could say one particular project could push us over two degrees," Westpac chairman Lindsay Maxsted told Friday's annual general meeting in Sydney.
"We believe in the science of climate change and we absolutely believe in trying to limit global warming to two degrees, that is a given ... (but) it's very difficult for us to conceive of a situation where a scientist would say `that particular project will take us over the edge'."
National Australia Bank has ruled out funding Adani's controversial Carmichael coal mine in Queensland but Westpac said it will continue to judge each project on merit.
"We will not be pulling out of coal or any industry per se," Mr Maxsted said.
"We will be supportive of coal companies provided they fit into our criteria."
Questioned by shareholders including Australian Geographic Society's Young Conservationist of the Year Amelia Telford, Mr Maxsted said coal companies needed to show they were taking steps to reduce their environmental impact to secure Westpac finance.
He said the development of so-call clean coal technology and a need to supply emerging economies meant it was not practical to pull out of coal entirely.
Protesters were also outside the meeting calling for the bank to rule out financing Adani's Galilee Basin coal projects.
Westpac already has the least exposure to fossil fuel projects of Australia's big four banks, loaning $5.9 billion across 59 fossil fuel deals since 2008, compared to leader ANZ's $12.6 billion across 99 deals, according to figures compiled by Market Forces.
Mr Maxsted said 61 per cent of Westpac's energy lending went toward renewables but would not give a timetable for a further move away from fossil fuel investments.
Chief executive Brian Hartzer told the meeting that the bank fully backed the aim of the UN's climate talks in Paris.
Negotiators in Paris are currently thrashing out the final details of a global agreement that aims to cut emissions with the aim of limiting global warming to the UN's 2010 target of two degrees Celsius - or even lower.
