NAB fails to defend funding for destructive fossil fuel companies

NAB has been lending heavily for projects and companies expanding the fossil fuel industry. As such, the bank today faced a formal proposal from shareholders telling it to stop funding new coal, oil and gas projects. NAB also faced a bombardment of questions from stakeholders concerned over its lending to community- and climate-wrecking companies, including from those impacted by NAB clients such as Whitehaven Coal.

NAB remains a heavy financier of fossil fuels, having poured $2 billion into major Australian companies expanding the fossil fuel industry since 2016. Despite an abundance of evidence pointing to there being no room to expand dirty fossil fuels if we’re to achieve the climate goals of the Paris Agreement or net-zero emissions by 2050, NAB’s recently updated climate policy fails to rule out funding for new oil and gas.

Far from ruling out new oil and gas, as the bank was announcing its new policy, it was also arranging funds for the proposed climate-wrecking Pluto 2 LNG project in Western Australia. Pluto 2 would process gas from Woodside’s massive climate-wrecking Scarborough gas proposal. Lifetime emissions from the Scarborough-Pluto project would be 1.6 billion tonnes of CO2, equivalent to 15 coal-fired power stations running for 30 years.

In light of this, Market Forces moved ahead and supported a shareholder resolution put to today’s meeting, calling on the bank to reduce its fossil fuel finance consistent with net-zero by 2050 and stop funding new fossil fuel projects.

NAB’s funding for climate- and community-destroying companies

Despite its commitments to the Paris Agreement and net-zero by 2050, and that achieving these goals leaves no room for new fossil fuel projects, NAB has continued pouring billions into companies and projects that expand the fossil fuel industry. Not only are these companies wrecking our climate, in many cases they’re also harming local environments and communities, and today NAB heard from those impacted.

Whitehaven Coal

In February 2020, NAB loaned $110 million to Whitehaven Coal, an Australian-based undiversified coal mining company pursuing dirty new coal mining projects.

Despite the IEA’s conclusion that “no new coal mines or extensions of existing ones are needed in the [Net Zero Emissions by 2050 scenario] as coal demand declines precipitously”, Whitehaven plans to spend around $2 billion on three new coal mines and expansions: Vickery, Narrabri Stage 3 and Winchester South. To justify these plans, Whitehaven refers to coal demand scenarios consistent with catastrophic global warming of almost 3ºC.

According to Traditional Owners, by 2016 Whitehaven had destroyed or damaged 38 sacred sites while pursuing its coal projects, including “10 sites of high significance”. Gomeroi Traditional Owner Karra asked when NAB will stop financing companies like Whitehaven Coal. As well as asking her question directly at the meeting, Karra recorded her question prior to the AGM:

Chairman Philip Chronican failed to say when it will stop funding Whitehaven, instead telling shareholders it will “be exiting our thermal coal exposures by 2030”. Of course, continuing to fund Whitehaven through to 2030 would be just as reprehensible as the havoc Whitehaven’s dirty coal projects would wreak between now and then.

Sally Hunter, a cattle farmer from Gomeroi country in NSW and Relationship Manager at Lock The Gate Alliance, attended the AGM to quiz Westpac about its funding for Whitehaven. Sally’s property is situated near Whitehaven’s Narrabri coal mine, and she has witnessed first-hand the company’s environmental destruction and law-breaking. In November, Whitehaven was fined by the NSW Land and Environment Court for illegally taking one billion litres of water between 2016-2019.

Sally invited members of the NAB board to North West NSW to see first-hand these issues and asked the bank why it lends to Whitehaven Coal given its appalling track-record and intention to build more dirty coal mines:

Mr. Chronican said he likes the idea of heading out to rural NSW but he’s not sure if he’s able to do so. He said NAB is consulting with its top 100 emitting customers (which presumably includes Whitehaven Coal) and if NAB believes those companies do not have credible transition plans, the bank would divest them. Given Whitehaven has no intention to stop pursuing new coal projects, an activity consistent with the failure of the Paris Agreement, NAB should immediately clarify its intention to imminently divest Whitehaven.

Pluto LNG (GIP / Woodside)

As NAB was releasing its new oil and gas policy, it was also arranging funds for Global Infrastructure Partners’ (GIP) acquisition of Pluto LNG Train 2, a project that would process gas from Woodside’s massive climate-wrecking Scarborough gas proposal. Lifetime emissions from the Scarborough-Pluto project would be 1.6 billion tonnes of CO₂, equivalent to 15 coal-fired power stations running for 30 years.

The project also threatens to accelerate degradation of the Murujuga Rock art (proposed for World Heritage listing) due to industrial emissions. In light of this, Traditional Owner Josie asked NAB if it’s comfortable with its involvement in facilitating the destruction of 40,000 year old cultural heritage and if the Chairman would come to Murujuga to see what’s at stake. Mr. Chronican failed to address the questions, instead providing information irrelevant to the questions asked. Watch the full exchange below:

The project also threatens to accelerate degradation of the Murujuga Rock art (proposed for World Heritage listing) du

In light of NAB’s recently released oil and gas policy excluding direct finance for greenfield gas extraction in Australia unless it ‘plays a role in underpinning national energy security’, a shareholder asked if this means NAB won’t provide financing for Woodside and BHP’s controversial Scarborough Gas development which is predominantly for export. Again, Mr. Chronican failed to address the question, incorrectly stating he had already answered the question elsewhere in the meeting.

In light of the 1.6 billion tonnes of CO₂ that would be enabled by the Pluto LNG Train 2 project, Market Forces’ Jack Bertolus asked NAB what evidence can NAB produce that enabling an additional 1.6 billion tonnes of CO2 is in any way compatible with limiting global warming to 1.5°C. Mr. Chronican failed to refer to or produce any such evidence.

Coastal Gaslink Pipeline (TC Energy)

Last year, NAB loaned CA$117.5 million to the 670km climate-wrecking Coastal Gaslink pipeline in Canada. 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.

Not only is this climate-wrecking gas project incompatible with limiting warming to 1.5°C, it is also currently being constructed on the unceded lands of Traditional Owners; the Wet’suwet’en. The hereditary chiefs of the Wet’suwet’en Nation fiercely oppose the project and have not provided their free, prior and informed consent.

According to an October 2021 update from Rainforest Action Network: “For the past twelve years, the Wet’suwet’en have asserted their sovereignty to stop fossil fuel companies from trespassing on their lands…In September 2021 Coastal GasLink bulldozed an ancient Wet’suwet’en village site, despite consistent calls to action and legal requirements to respect the site from Wet’suwet’en hereditary chiefs and archeologists alike. Right now, TransCanada Energy’s contractors building the pipeline are attempting to drill underneath sacred waterways”.

Hereditary Chief Woos of the Wet’suwet’en nation attended NAB’s AGM, asking the bank how it reconciles its commitment to the United Nations Declaration on the Rights of Indigenous Peoples (‘UNDRIP’) with its funding for Coastal Gaslink:

Chairman Philip Chronican’s answer was very different to the one he provided in answer to a similar question last year. At last year’s AGM, Mr. Chronican shamefully admitted to shareholders NAB is “not necessarily privy to” issues facing the projects it funds, implying NAB doesn’t fully assess the environmental, social and governance risks of its investments.

This year he told shareholders “we do look into environmental and social risks on projects” and that the bank has “no intention to doing any further greenfield gas or oil extraction outside of Australia so this is an historical issue only”. Confusingly, this implies NAB’s policy to exclude direct funding for greenfield gas extraction outside Australia also applies to midstream gas infrastructure (e.g. gas pipelines), even though the policy explicitly states it applies to gas extraction (e.g. upstream gas).

In regards to Chronican’s comment that “this is an historical issue only“, it’s unclear whether Mr. Chronican would be willing to meet face-to-face to deliver that message directly to impacted Traditional Owners currently facing forced eviction from their ancestral lands to make way for the Coastal Gaslink Pipeline.

NAB’s fossil fuel exposure

All of Australia’s major banks disclose their ‘exposure’, which can broadly be described as the total amount of money ‘on loan’, to certain fossil fuel sectors. Commonwealth Bank and Westpac provide the most detailed disclosure. When it comes to the coal industry, these banks disclosure how much they have on loan to sectors including coal mining, coal ports and coal haulage (rail). When it comes to oil and gas, all of NAB’s major competitors (ANZ, CBA and Westpac) disclose how much money is exposed to the oil and gas ‘value chain’, including oil and gas extraction, transportation, refining and retailing.

By contrast, NAB has much more limited disclosure. While it reveals its exposure coal mining and oil and gas extraction, it does not disclose its exposure to coal ports or rail, nor to oil and gas transport, refining or retailing. In light of this, a shareholder asked when NAB will disclose this information.

Chairman Philip Chronican told shareholders “the date that we should have the type of information you’re requesting is this time next year”.