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NAB
Australia’s most regressive bank on climate
$15.5 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 the most of the big four Australian banks in 2023 at $1.4 billion.
Despite claiming to support the climate goals of the Paris Agreement, NAB has now provided a total of $15.5 billion to the coal, oil and gas industries in the eight years since that agreement was signed.
NAB’s prolific financing of the industry amidst the climate crisis is a major concern for shareholders, 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.
Last updated: July 2024
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Tell NAB that its Paris Agreement pledge means no new fossil fuels!
NAB, whose team are you on?
NAB, proud sponsor of the AFL, continues to finance companies expanding the fossil fuel sector. NAB’s failure to rule out further finance to these climate wreckers undermines the bank’s pledge to align with the Paris Agreement and impacts the very communities NAB aims to support.
How NAB is still funding massive new fossil fuel developments
While NAB’s carefully worded policy means it can’t fund certain new and expanded fossil fuel projects directly, the bank is still pouring billions of dollars into companies pursuing those projects.
Fossil fuel funding since Paris
This chart 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.
NAB has loaned a total of $15.5 billion to fossil fuels since 2016. This includes:
- $3.3 billion to coal,
- $4.6 billion to gas (exc. LNG)
- $3 billion to LNG
- $4.6 billion to oil
Funding for expansionary 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 emissions. These projects include:
- Coastal Gaslink Pipeline
- Corpus Christi LNG
- Sabine Pass LNG Terminal
- Barossa Gas Project
- Freeport LNG Train 2
- Olive Downs Metallurgical Coal Mine
While NAB has ruled out funding certain expansionary fossil fuel projects directly, such as new thermal coal mines, and oil and gas fields, it hasn’t ruled out funding all expansion projects. NAB can still fund infrastructure projects that unlock those coal mines and oil and gas fields, like liquefied natural gas (LNG) projects and transmission pipelines.
Even with restrictions on new thermal coal projects, NAB can still fund new metallurgical coal mines. Due to its reliance on metallurgical coal, the steel industry accounts for 7% of global emissions. Despite the need to urgently transition away from all coal, the metallurgical coal industry is expanding. According to Global Energy Monitor, there are 237 proposed new metallurgical coal mines and 143 proposed thermal and metallurgical mixed mines globally.
Funding for companies with expansion plans
Since 2016 NAB has loaned $5.4 billion to companies with fossil fuel expansion plans through ‘corporate finance’ debt facilities.
See our section on ‘Climate transition plans’ 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, “NAB is seeking to act as a catalyst for climate action.” The reality is that NAB is a climate laggard. Behind the greenwashing spin, you’ll find a bank consistently willing to hand over its customers’ money to companies involved in new and expanded fossil fuel projects.
In recent years we’ve seen NAB finance some of the worst climate-wrecking companies and projects. 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. The Barossa project faces opposition from some Tiwi Islands Traditional Owner communities, as Santos plans to drill for gas in Tiwi Islands Sea Country.
In September 2022, Tiwi Islands Traditional Owners won a Federal Court challenge against NOPSEMA with respect to 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.
This loan in particular was mired in controversy due to the fact that it occurred whilst the Barossa gas project was being disputed by Tiwi Islands Traditional Owners. In April 2023, NAB received a human rights complaint for its involvement in the loan from six Traditional Owners and Elders from the Munupi, Malawu and Jikilaruwu clans on the Tiwi Islands, and one Elder from Larrakia country in Darwin, assisted by Equity Generation Lawyers. The complaint demanded that NAB withdraw from its current loan to Santos and not finance the associated Darwin LNG project, which would process Barossa gas. Read all about this loan in our blog post.
The complaint was effectively dismissed by NAB without consultation with Tiwi Traditional Owners. This prompted Traditional Owners to travel thousands of kilometres to attend the bank’s 2023 AGM, where they confronted the NAB board over the lack of engagement regarding the complaint. Their passionate address can be viewed here. Former NAB CEO Ross McEwan was invited to visit the Tiwi Islands to engage with the impacted Tiwi communites, but was non-committal in his response. As of July 2024, NAB is the only big four Australian bank that has not committed to engaging with the Tiwi Islanders on Country.
The urgency of this case was further demonstrated in January 2024 when Santos obtained its environmental approvals for Barossa, sixteen months agter the Federal Court’s ruling in September 2022. Santos is targeting first gas from Barossa in the third quarter of 2025.
Whitehaven Coal
Demonstrating just how damaging ‘general corporate finance’ can be in the hands of climate wrecking companies, on Friday 21 April 2023, Whitehaven Coal announced it intended to fast-track mining of its new Vickery thermal coal deposit. The scheduled Vickery open-cut thermal coal mine will begin with a ‘box-cut’, producing 1 million tonnes of thermal coal per annum in 2025. Despite its climate commitments, this coal expansion was going ahead with the financial backing of NAB.
Whitehaven wanted to refinance its $1 billion loan that NAB had previously participated in, likely in no small part because of its multi-billion dollar coal expansion strategy. But in a huge win for people power, on 17 July 2023, Whitehaven announced to the market that it had been unable to secure a refinance of the $1 billion corporate loan.
In November 2023, NAB announced it no longer has any corporate or project lending to pure play thermal coal mining companies, a position it intends to maintain into the future. This is a significant development that proves that people-powered movements can drive finance out of fossil fuels!
Whilst it’s welcome that NAB has exited from undiversified thermal coal miners without transition plans, it still remains exposed to Glencore, which despite being a diversified company is one of Australia’s biggest producers of coal, which is pursuing the Hunter Valley Continued Operations project, the largest coal mining proposal ever put forward in NSW. The proposed continuation of the mine would see mining continue until 2050, with emissions estimates of up to 1.2 billion tonnes of CO2-e, more than 2.5 times Australia’s current annual emissions. NAB should commit to no longer providing finance to any company expanding or extending the life of coal mines.
APA Group
In November 2023, NAB took part in a $1.25 billion loan to APA Group. While part of this loan will be used to fund APA’s acquisition of Alinta Energy’s existing Pilbara gas assets, it will also be used for ‘general corporate purposes’. The loan will not mature in full until 2033.
In 2023, APA Group signed preliminary agreements with the leading developers of the Beetaloo Basin, gas companies Empire Energy and Tamboran Resources, to construct pipelines that would enable fracking in the Beetaloo Basin. Market Forces analysis estimates Beetaloo gas would create end-user emissions of 1.1 billion tonnes of CO₂-e, more than double Australia’s annual emissions in 2021.
APA Group, as a pipeline company, is not required to have a transition plan under NAB’s current policy framework. This is a massive loophole when the pipeline infrastructure APA is planning to build will be used to enable a project that NAB would never be able to fund directly.
NAB must require all of its fossil fuel clients to have credible emissions reductions plans, otherwise it risks enabling them to develop projects completely out of line with its own climate commitments.
Coastal Gaslink Pipeline
In July 2022, NAB was involved in refinancing a loan to the climate wrecking Coastal Gaslink Pipeline. According to disclosures from the company, 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
In 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. Market Forces estimates that such an expansion would export gas with a potential to release at least 820 million tonnes of CO2 over its lifetime.
Climate transition plans – fixing NAB’s massive loophole enabling fossil fuel expansion
Since the beginning of 2016, almost 70% of NAB’s fossil fuel lending was in the form of ‘corporate finance’, meaning it was not related to any specific fossil fuel project, but instead loaned as ‘general’ corporate purpose finance to a fossil fuel company.
Corporate finance is a massive loophole enabling banks to continue to fund companies developing new fossil fuel supply whilst claiming to not fund new projects.
NAB loaned $5.4 billion in corporate finance to companies with plans to develop new and expanded coal, oil and gas from 2016-2023. This activity does not appear to be slowing down either- in 2023, NAB loaned $859 million to companies with expansion plans, after loaning $746 million in 2022, and $975 million in 2021.
The Net-Zero Banking Alliance (NZBA) has highlighted the risk of corporate finance being used for fossil fuel expansion, with its Transition Finance Guide stating “Given the fungibility of money, clients can use proceeds from general corporate purpose financing for various purposes once granted.” Those ‘various purposes’ include new and expanded fossil fuel projects.
A report by Global Energy Monitor published in October 2022 found that 80% of finance for new coal projects is coming from corporate finance. The 2023 report ‘Banking on Climate Chaos‘ found that 96% of fossil fuel companies’ funding between 2016-2022 was ‘general corporate’ finance.
As a result of sustained pressure from shareholders, customers and the broader community, NAB has taken some steps to address this massive loophole enabling it to fund the expansion of the fossil fuel industry.
In November 2023 NAB announced that from 1 October 2025 it will require the majority of fossil fuel extraction companies to have Paris-aligned climate transition plans in place in order to provide additional lending. While a welcome, and well overdue, development, the long-lead time means that NAB can keep providing corporate finance to climate wreckers without any plans to reduce their emissions until October 2025. This gives these companies even more time to push ahead with their destructive projects with the financial support of NAB. NAB needs to require this of all of its fossil fuel customers sooner, and refuse finance to any company developing or enabling new coal, oil and gas. This is something that even NAB’s shareholders recognise as in the best interests of the bank – with a whopping 28.3% voting in favour of a shareholder resolution at its 2023 AGM in favour of the above.
Following the shareholder backlash, NAB released an update on how it plans to ensure the fossil fuel companies it funds are aligned with the Paris Agreement. You can read Market Forces’ analysis on NAB’s latest update here.
NAB’s ambition is “to act as a catalyst for climate action, supporting emissions reduction and aligning with pathways to net zero by 2050, consistent with a maximum temperature rise of 1.5°C above pre-industrial levels by 2100.” If NAB wants to live up to its ambition and its climate commitments, it needs to disclose a clear and binding framework for ensuring all of its fossil fuel customers are aligned with a 1.5°C warming pathway.
NAB Climate Scorecard
since January 2016
Total lending to fossil fuels
$15,480 million
Lending to companies with expansion plans
$5,423 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 and expanded fossil fuels
NAB Policy Source: NAB 2023 Climate Report
Coal mines
The science
- IEA Net Zero Emissions by 2050 scenario (NZE): No new thermal or metallurgical coal mines or extensions
- IPCC (AR6): Emissions from existing fossil fuel infrastructure without additional abatement would exceed the total limit of emissions in 1.5°C pathways with no or limited overshoot
Thermal coal:
Project-level finance policy: Rules out project-level finance to new thermal coal mines, but not expansions or extensions of existing mines.
Corporate finance policy: No policy to rule out corporate lending to companies that are developing new, expanded or lifetime extensions of thermal coal mines.
Bonds policy: No policy to rule out arranging bonds to companies that are developing new, expanded or lifetime extensions of thermal coal mines.
Clients pursuing new, expanded, or thermal coal mine lifetime extensions: Glencore
Which banks are they lagging behind?
Lots of banks including:
Westpac will no longer provide corporate finance or ‘bond facilitation’ to companies earning more than 15% of their revenue from thermal coal mining, exiting any relationship with existing clients by 2025.
Barclays no longer provides general corporate purposes financing to clients engaged in opening new thermal coal mines or material expansion of existing thermal coal mines.
Standard Chartered will not provide financial services to companies that acquire or invest in thermal coal mines or develop new thermal coal assets.
DWS has declared that it will not make ‘new investments’ in companies that are investing in new or additional thermal coal mining, and will not renew existing investments in those companies.
Metallurgical coal:
Project-level finance policy: No policy to rule out project finance for new, expanded or lifetime extensions of metallurgical coal mines.
Corporate finance policy: Doesn’t rule out corporate lending to companies building new and expanded metallurgical coal mines, or mine lifetime extensions.
Bonds policy: Doesn’t rule out arranging bonds for companies building new and expanded metallurgical coal mines, or mine lifetime extensions.
Clients pursuing new, expanded, or metallurgical coal mine lifetime extensions: BHP
Which banks are they lagging behind?
Project finance:
HSBC will not provide new finance to any client for the specific purposes of, or new advisory services in connection with, activities that include new metallurgical coal mines.
Westpac will not provide project finance for greenfield (new) metallurgical coal mines.
Société Générale will not provide dedicated financial transactions, products and services when the underlying activities are: Metallurgical coal extraction activities.
Corporate finance and bonds:
La Banque Postale has committed to not provide finance to coal companies that are developing new coal-related projects.
Coal power plants
The science
- IEA NZE: No new coal power projects
- IPCC (AR6) limited overshoot 1.5°C pathways: No new fossil fuel infrastructure (See above)
Project-level finance policy: Rules out project-level finance to new or expanded thermal coal-fired power plants.
Corporate finance policy: No policy to rule out corporate lending to companies expanding their coal-fired power generation capacity.
Bonds policy: No policy to rule out bonds to companies expanding their coal-fired power generation capacity.
Which banks are they lagging behind?
CommBank: which has ruled out providing corporate finance or ‘bond facilitation’ to companies that are proposing to expand or are expanding their coal-fired power generation capacity.
Oil and gas fields
The science
- IEA NZE: No new long lead time conventional oil and gas projects
- IPCC (AR6) limited overshoot 1.5°C pathways: No new fossil fuel infrastructure (See above)
Project-level finance policy: Rules out project finance to new oil and gas fields, but not expansionary projects.
Corporate finance policy: No policy to rule out corporate lending to companies pursuing new and expanded oil and gas fields.
Bonds policy: No policy to rule out arranging bonds for companies pursuing new and expanded oil and gas fields.
Clients pursuing new and expanded oil and gas fields: Santos, Beach Energy.
Which banks are they lagging behind?
Corporate finance:
Danske Bank has decided not to offer long-term financing or refinancing to E&P oil and gas companies that intend to expand supply of oil and gas beyond what was approved for development by 31st of December 2021.
NatWest has committed to stop lending to and underwriting bonds for major oil and gas producers unless they have a Credible Transition Plan aligned with the 2015 Paris Agreement.
Crédit Mutuel has committed to not financing any oil and gas company that does not have a planned year-on-year oil and gas reduction trajectory.
LNG infrastructure
The science
- IEA NZE: “a global [LNG] supply glut forms in the mid-2020s and under construction projects are no longer necessary.” (p. 139)
- IPCC (AR6) limited overshoot 1.5°C pathways: No new fossil fuel infrastructure (See above)
Project-level finance policy: No policy to rule out project finance to LNG projects servicing new or expansionary oil and gas fields
Corporate finance policy: No policy to rule out financing to companies pursuing new and expansionary LNG projects
Bonds policy: No policy to rule out arranging bonds for companies pursuing new and expansionary LNG projects
Clients pursuing new and expanded LNG projects: Santos, Global Infrastructure Partners (Pluto 2 LNG Train), Sabine Pass/Cheniere Energy, KKR/Sempra Energy
Pipelines
- IEA NZE: No new long lead time conventional oil and gas projects
- IPCC (AR6) limited overshoot 1.5°C pathways: No new fossil fuel infrastructure (See above)
Project-level finance policy: No policy to rule out project finance to pipelines servicing new or expanded oil and gas fields.
Corporate finance policy: No policy to rule out corporate lending companies developing pipelines for new and expanded oil and gas fields.
Bonds policy: No policy to rule out arranging bonds for companies developing pipelines for new and expanded oil and gas fields.
Clients pursuing pipelines for new and expanded oil and gas fields: APA Group, Coastal Gaslink Pipeline
Appendix
Reporting differences
Market Forces reports 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, coal-fired power generation, and mixed-fuel (fossil fuel) power generation.
NAB’s exposure has been simplified below into ‘coal’ and ‘oil and gas’ exposures.
2023 Annual General Meeting season
ANZ, NAB and Westpac continue to undermine their commitments to the Paris Agreement by financing companies that are expanding the fossil fuel industry.
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