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NAB

Australia’s most regressive bank on climate

$14.1 billion

Loaned to dirty fossil fuels globally since 2016

NAB is Australia’s most regressive bank when it comes to funding fossil fuels, having provided a total of $4.5 billion in 2021 and 2022. This almost matched Australia’s biggest fossil fuel lender ANZ’s $4.6 billion.

Despite claiming to support the climate goals of the Paris Agreement, NAB has now provided a total of $14.1 billion to the coal, oil and gas industries in the seven years since that agreement was signed. 

NAB’s prolific financing of the industry amidst the climate crisis is a major concern for customers and the wider community. At a time where banks around the world are increasing their climate ambition, NAB is trending in the wrong direction. This is not a bank that takes climate action seriously.

Take action

Tell NAB that its Paris Agreement pledge means no new fossil fuels!

2023 AGM season

ANZ, NAB and Westpac continue to undermine their commitments to the Paris Agreement by financing companies that are expanding the fossil fuel industry.

NAB, whose team are you on?

NAB, proud sponsor of the AFL, is also a lender to Santos, and up until recently Whitehaven Coal*, two of Australia’s most controversial fossil fuel companies. NAB’s failure to rule out further lending to these climate wreckers undermines the bank’s pledge to align with the Paris Agreement and impacts the very communities NAB aims to support.

* Details in the Whitehaven Coal case study below. 

How NAB is still funding massive new fossil fuel developments

While NAB’s carefully worded policy means it can’t fund new fossil fuel projects directly, the bank is still pouring billions of dollars into companies whose sole purpose is to expand the fossil fuel industry.

Fossil fuel funding since Paris

The chart shown right shows NAB’s year-on-year lending to different fossil fuel sectors since January 2016. The charts shown below include lending to expansion projects and lending to companies with fossil fuel expansion plans. 

We have included NAB’s own reported exposures to fossil fuels as a further demonstration of the bank’s trends.

The chart shown right shows NAB has loaned a total of $14.1 billion to fossil fuels since 2016, this includes: 

 

  • $3.27 billion to coal,
  • $4.3 billion to gas (exc. LNG)
  • $2.69 billion to LNG
  • $3.83 billion to oil

Funding for new fossil fuel projects

Since 2016 NAB has loaned $2.2 billion to new fossil fuel projects, including:

  • $167 million to new coal projects,
  • $1.1 billion to new gas projects (exc. LNG)
  • $797 million to new LNG projects
  • $105 million to new oil projects

In total, these projects would result in 6 billion tonnes of CO2-equivalent.

 

Funding for companies with expansion plans

Since 2016 NAB has loaned $4.6 billion to companies with fossil fuel expansion plans through ‘corporate finance’ debt facilities.

See our ‘Corporate finance’ section below to find out more about how NAB’s corporate finance policy is enabling it to fund fossil fuel expansion.

 

 

 

Expanding fossil fuels  

NAB is trying to establish itself as a climate leader in Australia. NAB proudly states in its Climate Report, “The Group’s climate ambition is to act as catalyst for climate action.” The reality is that NAB is a climate laggard. Beyond the greenwashing spin, you’ll find a bank consistently willing to hand over its customers money to companies building new fossil fuel projects.

In recent years we’ve seen an ongoing trend of lending to some of the worst climate-wrecking companies. Check out some of these examples below.

NAB’s customers – case studies

Scarborough/Pluto 2 LNG
In March 2022, NAB loaned $290 million to Global Infrastructure Partners as part of a $4.6 billion deal to purchase 49% of the Pluto 2 LNG project, enabling Woodside to go ahead with Pluto 2 and its associated new Scarborough gas field. The gas from the entire Scarborough-Pluto 2 project will facilitate an estimated 637 million tonnes of CO2-e lifetime emissions when combusted, more than Australia’s entire annual emissions in 2021.
Santos
In August 2022, NAB loaned $72 million to Santos as part of a $1.8 billion loan. This loan was related to the highly controversial Barossa gas field Santos is currently developing, a project that is disputed by traditional owners of the Tiwi Islands, the waters of which is where the project is located.

In September 2022, Tiwi Islands traditional owners won a federal court challenge against Santos’ Barossa project. The court ruled that Santos had failed to adequately consult Tiwi Islands traditional owners about the project. Santos challenged the ruling, but its appeal was rejected by the Federal Court in December. Despite the ruling and the Munupi people of the Tiwi Islands declaring “Munupi people don’t want any fossil fuel activities off the coast line of the Tiwi Islands”, Santos remains adamant that first gas will be achieved from Barossa in the first half of 2025.

Santos’ own lawyers argued in court that traditional owners’ connection to sea and country was more like a personal interest, “in the sense of a past time or a hobby” than a genuine legal interest. That Santos considers traditional owners’ interest in the land to be a “hobby” shows a complete disregard for the rights of Indigenous Australians.

This loan in particular was mired in controversy due to the appalling fact that it occurred whilst the Barossa gas project was being disputed by Tiwi Islands Traditional Owners. Read all about this loan in our blog post.

In April 2023, NAB received a human rights complaint for its involvement in the loan from six people from the Munupi, Malawu and Jikilaruwu clans on the Tiwi Islands, and one from Larrakia country in Darwin, assisted by Equity Generation Lawyers. The complaint demands that NAB withdraw from its current loan to Santos and to not finance the associated Darwin LNG project, which would process Barossa gas. Read all about this loan in our blog post.

Whitehaven Coal
In February 2020, NAB lent $110 million to Whitehaven Coal as part of a $1 billion loan to the Australian coal giant. Whitehaven is planning to spend around $4 billion on three new coal mines and expansions: Vickery, Narrabri Stage 3 and Winchester South. These mines have marketable coal reserves of almost 500 million tonnes. When emissions from digging up and burning the coal are added, over their lifetimes these three mines would unleash over 1.1 billion tonnes of carbon emissions, the equivalent of more than twice Australia’s annual emissions.

In the last decade Whitehaven has more than doubled its production. At the company’s 2021 AGM, CEO Paul Flynn confirmed Whitehaven could more than double its coal production again by 2030 through these new coal projects. This is in stark contrast with the climate science that says 95% of Australia’s coal reserves must remain unburned, and coal supply must decline 11% every year between 2020 and 2030 to limit global warming to 1.5ºC means.

This company has no plans to transition from coal and yet under NAB’s current policy it can still lend to Whitehaven up until 2030.

UPDATE: On July 17 2023 Whitehaven Coal announced it had failed to renew its $1 billion corporate loan from a syndicate of banks including NAB and Westpac, which had been in place since February 2020. This loan was first inked in early 2013, meaning this failure to renew marks the end of ten years of financial backing from major banks. NAB is no longer exposed to Whitehaven Coal, and Whitehaven Coal no longer has the financial backing of any of Australia’s big four banks.

NAB quietly let the loan lapse however, and made no public statement that it was ending its relationship with Whitehaven Coal. Nor did the bank update and close any of its policy loopholes. NAB’s current policy settings still remain inadequate and enable it to provide corporate finance to, or arrange bonds for companies developing new coal projects. This is a problem considering one of NAB’s client’s is Glencore, which has plans to develop expanded coal mines that would operate beyond 2050.

Coastal Gaslink Pipeline
In July 2022, NAB was involved in refinancing a loan to the climate wrecking Coastal Gaslink Pipeline. According to financial subscription sources, Coastal GasLink had to refinance and increase its previous loan by a whopping CAD $1.669 billion (approx. AUD $1.861 billion) due to significant cost blow-outs in the construction phase. NAB’s involvement in the increased loan exposes it to this destructive and controversial project for a further two years until 2029, when the debt matures.

Based on conservative estimates, this pipeline would enable the release of 610 million tonnes of CO2 over its lifetime, more than 80% of Canada’s greenhouse gas emissions in 2020. In no way is this project in line with the goals of the Paris Agreement or consistent with the International Energy Agency’s Net Zero Emissions by 2050 scenario.

As well as being incompatible with limiting warming to 1.5°C, the pipeline is also currently being constructed on the unceded lands of the Wet’suwet’en First Nations people. The hereditary chiefs of the Wet’suwet’en Nation fiercely oppose the project and have not provided their free, prior and informed consent. Coastal GasLink’s gas pipeline crosses approximately 625 rivers, creeks, waters, streams and lakes on its route across British Columbia.

Dirty Bonds
As recently as November 2022, NAB was involved as a bookrunner in arranging a bond for the Sabine Pass LNG facility in Louisiana, USA.

Sabine Pass is a giant LNG facility, with a capacity of producing 30 million tonnes of LNG per year – equivalent to one-third of Australia’s entire LNG industry. But it also has plans to add an additional 20 million tonnes of LNG production capacity through the Sabine Pass Stage 5 Expansion Project. We estimate that such an expansion would export gas with a potential to release at least 820 million tonnes of CO2 over its lifetime.

Corporate finance – the massive loophole enabling fossil fuel expansion

In May 2021, the IEA published its Net-Zero 2050 Scenario, which clearly stated there is no room for new fossil fuels in a world that hopes to keep global warming to 1.5C. These findings have been upheld even amidst a global energy crisis in 2022, with the IEA declaring its 2022 World Energy Outlook:can justify a wave of new oil and gas infrastructure in a world that wants to reach net zero emissions by 2050”

In late 2022, a UN High Level Expert Group stated that: 

“Non‑state actors cannot claim to be net zero while continuing to build or invest in new fossil fuel supply”

Corporate finance for ‘general corporate purposes’ is a massive loophole enabling banks to continue to fund companies developing new fossil fuel supply whilst claiming to not fund new projects. 

Unfortunately, money is fungible and if a company does nothing but extract fossil fuels, and has plans to extract even more, whatever kind of debt facility they have is enabling them to do both these things. A report by Global Energy Monitor published in October 2022 found that 80% of finance for new coal projects is coming from corporate finance. 

In 2022, NAB loaned $746 million to companies with expansion plans, after loaning $975 million in 2021. And NAB’s current policy enables this continue happening until at least October 2025:

NAB will keep providing corporate finance to climate wreckers and only expects them to have transition plans by 1 October 2025. This gives these companies almost three more years to push ahead with their destructive projects. NAB has also not provided a definition of what it expects from a client’s transition plan.

NAB has publicly stated it hasn’t financed any new thermal coal mining projects since 2015. NAB has a policy which rules out providing ‘project finance’ for new coal mines (a loan that will be exclusively used for that project). But NAB does not rule out ‘corporate finance’ loans to undiversified coal mining companies like Whitehaven Coal (loans to be used for ‘general corporate purposes’).

This glaringly obvious loophole means that NAB can finance companies like Whitehaven and Santos – with plans to build massive new coal mines and oil and gas fields, under the guise of not providing direct project finance. On Friday 21 April, Whitehaven Coal announced it will fast-track mining of its new Vickery thermal coal deposit, with construction taking place as early as June this year. The scheduled open-cut thermal coal mine will begin with a ‘box-cut’, producing 1 million tonnes of thermal coal per annum as early as 2024, which Whitehaven plans to rapidly upscale to produce 10 million tonnes of coal per annum in 2025. As long as NAB continues to fail to rule out providing more finance to Whitehaven, it is complicit in their coal expansion.

UPDATE: Despite bankrolling Australia’s coal giant until July 2023, on July 17 2023 Whitehaven Coal announced it had failed to renew its $1 billion corporate loan, which had been in place since February 2020. This loan was first inked in early 2013, meaning this failure to renew marks the end of ten years of financial backing from major banks. NAB is no longer exposed to Whitehaven Coal, and Whitehaven Coal no longer has the financial backing of any of Australia’s big four banks.

However, NAB’s current policy settings still remain inadequate and enable it to provide corporate finance to, or arrange bonds for companies developing new coal projects. This is a problem considering one of NAB’s client’s is Glencore, which has plans to develop expanded coal mines that would operate beyond 2050.

CommBank

NAB Climate Scorecard

since January 2016

Total lending to fossil fuels

$14,093 million

Lending to companies with expansion plans

$4,564 million

Lending to expansionary projects

$2,215 million

Total emissions enabled from expansionary projects
(tonnes CO2)

6 billion

The data in this section covers the timeframe 1 Jan 2016 – 31 Dec 2022

NAB policy scorecard

New fossil fuels Project finance policy wdt_ID Corporate finance policy Financing examples
Coal mines X 80 Doesn't rule out companies building new or expanded coal mines Olive Downs Metallurgical Coal Mine
Glencore
Coal power plants X 82 Doesn't rule out companies building new or expanded coal power plants
Gas fields Doesn’t rule out new or expanded gas fields 84 Doesn’t rule out companies building or expanded new gas fields Santos
Beach Energy
Cooper Energy
Gas power plants Doesn't rule out new or expanded gas power plants 85 Doesn't rule out companies building new or expanded gas power plants
LNG projects Doesn’t rule out new or expanded LNG projects 86 Doesn’t rule out companies building new or expanded LNG projects Pluto 2 LNG Train
Santos
Sabine Pass LNG Facility (Bond)
Oil fields Doesn’t rule out new or expanded oil fields 87 Doesn’t rule out companies building new or expanded oil fields Santos
Appendix

Market Forces report lending differently to the banks

Each of the big four banks report their fossil fuel exposures based on their lending portfolio to the industry. However, the banks use different reporting methodologies, with some reporting in more detail than others in terms of total exposures to the fossil fuel supply chain.

Market Forces reports on the lending that banks participate in each year, including refinancing of existing deals. We consider each refinancing a conscious decision by a lender to continue supporting a company or project, and lending groups can and often do change upon refinancing and we want to capture this.

In addition, through refinancing existing loans for a new fixed term, a bank is making money available to a fossil fuel company that it otherwise would not have if the bank had decided to not refinance.

When banks report on exposure however, refinancing will not show up as ‘additional exposure’ unless the bank decides to commit more money, as that money is already on the bank’s books. Whilst this approach is legitimate, we believe it doesn’t capture the extent of support the banks provide to companies by refinancing, which is essentially to provide more money to fossil fuel companies for longer periods of time.

NAB's reported fossil fuel exposure

NAB reports its fossil fuel exposure to:

Oil and gas extraction, thermal coal mining, metallurgical coal mining, gas-fired power generation and coal-fired power generation.

NAB’s exposure has been simplified below into ‘coal’ and ‘oil and gas’ exposures.

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