Melbourne, 14 November 2016
NAB’s climate change position announced today sets it apart from the major banks, but the real proof will be in its future lending decisions, according to environmental finance campaigners Market Forces.
The bank’s “Dig Deeper” sustainability report[1], released today, adopts important new language committing NAB to drastically constrain fossil fuel investment, resulting in a rapid transformation of the bank’s loan book towards clean, renewable energy.
The key elements of NAB’s climate change position are:
- That addressing climate change requires a “material decrease in the use of fossil fuel-based energy and a corresponding increase in renewable energy”;
- A recognition of the important role that “carbon budgets” play in guiding action;
- That the bank is committed to playing an active role in this transition and that it affects the bank’s “operations and financing activities”.
Reacting to the sustainability report, Market Forces Executive Director Julien Vincent said:
“NAB is the only bank of the big four to have recognised the importance of the carbon budget. Acknowledging it is a key step towards turning commitments on supporting the ‘less than 2°C’ goal into real action.”
“If NAB is true to its word, it will simply not be possible for it to issue financial support to companies or projects that expand the scale of the fossil fuel industry, because there is not enough budget left for many existing fossil fuel projects around the world to see out their lifespans, let alone new projects.
When asked last month by a House of Representatives Economics Committee Hearing whether Westpac’s commitment to support the two degree global warming limit meant it would need to stop financing projects that expand the global stock of fossil fuel reserves, CEO Brian Hartzer replied by saying he didn’t think it would “get to that point”.
Both ANZ and Commonwealth Bank have baulked at acknowledging that keeping global warming below two degrees requires limits to the amount of carbon that can be reasonably burned, the latter repeating this answer to shareholders at their AGM last week.
A study earlier this year showed NAB to be the only one of Australia’s major banks to have loaned more to renewable energy than fossil fuels since they all came out in support of the two degree global warming limit last year[2].
In September, over 100 community groups and prominent Australians wrote to all four major banks, calling on them to avoid financing projects that expand the scale of the fossil fuel industry, and rapidly phase out their fossil fuel exposure, replacing it with renewable energy [3]. The language in NAB’s sustainability report creates space for those critical actions to take place.
“While NAB’s new language offers hope that the major banks are shifting to support a low-carbon economy, we will continue to closely watch their lending activities to make sure they are delivering on their commitments.
“Now the ball is in the court of the other major banks. Will they finally have the courage to recognise the limits to carbon dioxide emissions that are necessary to keep global warming below two degrees? Will they rule out investments in projects that expand the fossil fuel industry?
[1] Dig Deeper 2016 (page 27): http://digdeeper.nab.com.au/assets/documents/2016%20Dig_Deeper_Report.pdf
[2] Banks’ 2°C policy scorecard: https://www.marketforces.org.au/twodegrees/
[3] Open letter to the major banks by community groups and prominent Australians: https://www.marketforces.org.au/openletter/