The Chairman of NAB, Dr Ken Henry, confirmed that the bank would no longer lend to new thermal coal projects at today's annual general meeting.
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But at the annual general meeting this morning it wasn't all smooth sailing for NAB on climate change and energy. Being the first of Australia's "big four" banks to rule out lending to new thermal coal mines is a big step, but NAB still had a lot of questions to answer about how they are managing climate risk and transitioning to a decarbonised economy.
Here are a few of the highlights...
Not just ruling out thermal coal mines, but getting out of thermal coal altogether!
This year, NAB has financed fossil fuel companies including Oil Search and Whitehaven Coal, both of which are actively seeking to expand the fossil fuel industry. Whitehaven is even justifying its future based on a scenario where temperatures rise up to 6ºC.
This is entirely inconsistent with the goal NAB supports of holding global warming to below 2ºC, so how does NAB justify supporting companies that actively undermine the Paris climate change agreement?
It turns out that on thermal coal, at least, we could see even more change. Dr Henry told a shareholder concerned with their broader fossil fuel investments that their exposure to thermal coal will continue to decline, indicating a phase out from the sector!
Increasing renewable energy support by slowing it down?
In their latest sustainability report, NAB increased its commitment on renewable energy and clean tech lending to $20 billion from 2015-2025.
But having already loaned $5 billion in the first two years, shareholders were keen to ask why the target would reflect a slowing down of clean tech support from this point on.While Dr Henry didn't answer the question, he did say that growth of renewable energy was 'undeniable.'
Climate risk as a material business risk
When the auditors of NAB, Ernst & Young, were asked if they classify climate risk as a material business risk, the answer was yes.A shareholder then asked why the company continues to loan to companies such as Boral, Downer EDI and Beach energy. Companies that are clearly impacted by climate yet do not classify climate risk as a material business risk. Dr Henry didn't directly answer the question however stated that NAB was looking to decrease their exposure to climate risk in their loan book.
Our overall summary of how NAB performs on climate change
The big banks have all committed to the goal of holding global warming below 2ºC. Are they living up to those commitments?
NAB thermal coal mining ban
Find out more about NAB's policy update