National Australia Bank

NAB grilled over fossil fuel finance and human rights issues at 2023 AGM

19 December 2023

• NAB’s shareholders sent a clear message to the bank that it needs to address its role in fuelling climate change at the bank’s AGM on 15 December in Sydney.
• A massive 28.3% of NAB’s shareholders, representing nearly $27 billion, voted in favour of Market Forces climate shareholder resolution, demanding the bank close the gaps in its fossil fuel lending policy.
• If this many shareholders were voting against the company’s executive bonus packages or the election of a board member, NAB would be scrambling to address shareholders’ concerns.
• The bank was also confronted by Tiwi Islands Traditional Owners over its rejection of their human rights complaint related to NAB’s financing of Santos’ Barossa project.
• NAB was grilled by shareholders, young people, scientists, and even its own staff over its fossil fuel finance loopholes.

NAB is trying to establish itself as a climate leader in Australia. The bank has been pumping out positive, climate-related content this year after its reputation came under fierce public scrutiny for its financial backing of Whitehaven Coal until July 2023.

However, in 2021-2022 NAB loaned $4.5 billion to fossil fuels, with $2.4 billion of this going to fossil fuel expansion. These totals were just behind the biggest financier of fossil fuels and perennial climate laggard ANZ.

NAB did announce last month that from 1 October 2025, it ‘intends’ to require oil and gas, metallurgical coal, and power generation (25% or more electricity generated from coal) to have a Paris-aligned transition plan in order to receive new or renewed corporate or project lending. While obviously a welcome development, that also means NAB has left itself open to providing more finance to climate wrecking companies and projects for almost two more years.

A major feature of the AGM was the attendance of human rights advocate Antonia Burke, and Tiwi Traditional Owners Simon Munkara and Pirrawayingi Puruntatameri, who travelled thousands of kilometres from the Tiwi Islands to meet with NAB, which is one of the financiers of Santos’ Barossa gas project that threatens their homes.

Traditional Owners have been educating investors, government, regulators, and the broader community about the project’s impacts on their cultural heritage and sea country for well over a year now. They’ve taken Santos to the Federal Court over a botched consultation process and won, and also filed human rights grievances at Australian super funds and Australian and major international banks for their investment in Santos. Santos hasn’t been able to drill into the Barossa gas field since September 2022, putting the whole project on hold for fifteen months.

But just days ago the federal regulator for offshore oil and gas, NOPSEMA, re-granted Santos its approval to drill into Barossa. With Santos now allowed to proceed with its monster project, it’s more urgent than ever that NAB understands what Barossa will do to the Tiwi Islands and its Traditional Owners.

Traditional Owners have made it clear that they do not consent to any fossil fuel activities being developed off the coast line of the Tiwi Islands, yet NAB has refused to pull its funding from Barossa, or even publicly rule out funding Darwin LNG, the gas plant that will service Barossa.

Shareholder resolution

In NAB’s 2022 Climate Report, the bank stated that from 1 October 2025, new corporate lending and renewals for upstream oil and gas companies would require them to have a ‘transition plan’ in place.

There were substantial gaps in this policy that would enable NAB to continue bankrolling climate wreckers. It wasn’t clear whether and how NAB was going to ensure those transition plans are aligned with 1.5°C, why it only applied to upstream oil and gas companies instead of all fossil fuel companies, and if the bank will refuse all new finance to companies that fail to prove they’re on a 1.5°C pathway.

NAB has a track record of keeping these gaps open for the benefit of its fossil fuel clients. Analysis released in May 2023 from Market Forces revealed that between 2016 and 2022, NAB loaned $14.1 billion to fossil fuels, including $6.8 billion to fossil fuel expansion.

Watch Market Forces Bank Analyst Kyle Robertson present the resolution speech below.

While NAB has provided some further disclosure around expectations from fossil fuel companies climate transition plans, substantial gaps remain in its policy that could see it continue to fund fossil fuel expansion until October 2025 and even beyond.

NAB’s left itself almost two years to provide direct project finance to new and expanded metallurgical coal mines, LNG projects, oil and gas pipelines and even expansions of existing oil and gas fields. In a climate crisis, this is simply unacceptable.

NAB still has no restrictions on the facilitation or arranging of bonds to fossil fuel companies, a source of finance that fossil fuel companies are increasingly targeting. According to Toxic Bonds, coal companies raise 2.5 times more capital through bonds than through bank loans.

Tiwi Islands and the Santos human rights complaint

In April, Traditional Owners filed a human rights complaint at NAB over its involvement in the loan for the Santos’ Barossa project, a loan that appallingly was finalised while Traditional Owners were challenging Santos over its inadequate consultation process. The human rights complaint requested the bank publicly apologise to Traditional Owners, provide information about any human rights due diligence done by the bank and to meet the Claimants for a dialogue on-country.

NAB refused to meet the Traditional Owners on Country, and denied that it had contributed to the human rights impacts of the Barossa project. NAB failed to provide any justification for its position that it did not contribute to the human rights impacts. NAB also did not explain how they would respect the Claimants’ right to free, prior and informed consent (FPIC) in their response, nor did they explain why they entered into a loan in August 2022 when there was no community consultation or FPIC for the Barossa project.

Today, NAB was confronted by Tiwi Islands Traditional Owners over its lack of engagement with the Complainants about a project that threatens their land, sea country, livelihoods and cultural heritage.

Human rights advocate Antonia Burke extended an invitation to NAB CEO, Ross McEwan, to visit the Tiwi Islands and engage with Traditional Owners about the human rights complaint, as Westpac CEO Peter King had committed to the day before. McEwan was non-committal in his response to the request, simply stating that “should we be involved [in the project] we would be happy to have those conversations.”

Mr. McEwan was asked again later in the meeting if he would commit to engaging with the Tiwi Islanders on Country, to which he responded, “if we’re involved, I’d be delighted to go across, if we do get involved.”

NAB has confirmed it took part in the loan that was the subject of the human rights complaint. In response, NAB stated it “has carefully considered and investigated all of the concerns raised in the Grievance”, but did not provide further information as to how it assessed the human rights risks.

With Mr. McEwan seeming to want to avoid any public acknowledgement of NAB’s involvement in financing Barossa, it’s not clear if the NAB CEO will be making a visit to Tiwi Islands to discuss the impacts of the mega gas project.

After having to travel thousands of kilometres just to talk to NAB’s leadership, we hope that Mr. McEwan will show the same level of respect his peers at Westpac and CommBank have and agree to meet them on country.

Human rights advocate Antonia Bourke, and Tiwi Islands Traditional Owners, Pirrawayingi Puruntatameri, and Simon Munkara, also held a press conference to discuss the horrific impacts that Santos’ Barossa project has had on their lives, their land, and their wellbeing.

NAB staff angry over failure to stop finance for fossil fuel expansion

NAB also faced criticism from its staff about its performance on climate. A NAB staff member, shareholder and Finance Sector Union member recommended that all shareholders vote in favour of the resolution put forward by Market Forces, further stating that they wanted to be proud to work at NAB and see its bank rule out financing fossil fuel expansion that is incompatible with the Paris Agreement.

NAB Chairman Phil Chronican said that NAB wanted its workers to be proud to work at NAB, and that hopefully as their plans progress and their “understanding of them improves” that could happen.

The NAB staff member also asked if the bank would commit to involving its workers in the development of the bank’s climate policies in future, reflecting that staff had not previously had input into NAB’s fossil fuel finance policies, despite the impact that they have on NAB’s workforce.

In response, CEO Ross McEwan said that the policy had been led by NAB’s corporate and institutional banking team, and acknowledged that NAB needed to “do some more work with some of our colleagues who feel that they want a greater input, which is absolutely fantastic.” We hope this is backed by action.

Is NAB going to require fossil fuel companies to reduce their production of coal, oil and gas?

In NAB’s 2023 Climate Report, the bank says it expects the emissions reductions plans of fossil fuel companies to include ‘Scope 1, 2 and 3 emissions disclosures’, as well as interim and long-term targets and their alignment with the Paris Agreement.

It’s not clear whether NAB is actually going to require its heaviest emitting customers to have Paris-aligned Scope 3 emissions reduction targets, which for a fossil fuel extraction company refer to emissions from the burning of its products and typically account for 90% its total, or whether NAB just expects these emissions to be public knowledge.

NAB was asked by Market Forces Banks Analyst, Kyle Robertson if it expects Paris-aligned Scope 1, 2 and 3 emissions reductions targets from the coal, oil and gas companies it funds, and whether Paris-aligned will mean 1.5°C or the far more dangerous and risky well-below 2°C scenario?

In response NAB Chairman Phil Chronican said that NAB’s ambition was to target a world of 1.5°C, but that individual transition plans may differ from this as there are different pathways for different industries.

The science is clear that new and expanded coal, oil and gas is not compatible with 1.5C. When NAB assesses its fossil fuel customers’ transition plans, we should certainly expect that NAB concludes there’s no credible, Paris-aligned pathway that allows them to expand their fossil fuel operations.