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Media Release

NAB mealy-mouthed on 2030 thermal coal exit

5 November 2020

Thursday 5 November 2020: NAB’s full year results presentation released today reveals the bank is “expected” to exit thermal coal mining by 2030, five years earlier than its inadequate official commitment to exit by 2035. 

NAB’s announcement last year that it would exit thermal coal mining by 2035 drew widespread criticism for falling short of time frames necessary to hold global warming to 1.5ºC and investor expectations for the elimination of thermal coal.

Signatories to the Global Investor Statement on Climate Change – a group of 631 investors managing over US$37 trillion – demand an exit from thermal coal by 2030 in OECD countries, a goal that has been matched by each of Australia’s big four banks, except NAB.

The results today reveal NAB’s exposure at default (EAD) to coal mining declined 13%, from $1.51 billion to $1.30 billion, in the year to September 2020.

“If NAB were to officially commit to a Paris-aligned timeframe, this would effectively mean no Australian bank or insurer is willing to finance thermal coal beyond 2030,” said Jack Bertolus, Research Coordinator, Market Forces.

“NAB’s exposure to coal has fallen year-on-year and it’s clearly confident it can exit thermal coal in line with the Paris Agreement, so why not just admit the 2035 date was a mistake and now commit to doing so?”

“Not only does NAB need to quit thermal coal by 2030, it needs to quit being mealy-mouthed about its commitments.”

Market Forces has coordinated the lodging of a NAB shareholder resolution calling for the disclosure of targets to reduce loan book exposure to the coal, oil and gas sectors in line with the goals of the Paris Agreement. 

“NAB has given us no reason to alter this resolution, as it has failed to move on oil and gas and still has a coal policy that is misaligned with the Paris climate goals. So we will take the resolution to the annual general meeting and encourage investors to support it.”

NAB’s exposure to gas-fired power generation also increased by 4% in the year to September 2020, from $0.94 billion to $0.98 billion, retaining its position as the major Australian bank most exposed to dirty gas-fired power generation, with Westpac reporting exposure of $0.67 billion, Commonwealth Bank $0.6 billion, and ANZ $0.14 billion.

In September, NAB’s CEO Ross McEwan told a House of Representatives Committee the bank would review its oil and gas policies “over the next six to 12 months”, telling the Committee “I think we’ve got a lot of work to do in having a look at that whole issue and its impact across all of Australia and all the constituent parts, including what energy sources Australia needs to have.”

Just two weeks ago, NAB loaned US$50 million to Santos, a company expanding the gas sector with projects including its highly controversial Narrabri Gas Project. Earlier this year, Santos’s board rejected a shareholder proposal to align capital expenditure and emission reduction plans with the Paris climate goals.

The bank reported its exposure to oil & gas extraction fell by a third, from $4.09 billion to $2.74 billion, but attributed the drop to “AUD currency appreciation of USD denominated exposures and lower mark-to-market position of treasury related products”. It’s unclear what the underlying change to oil & gas extraction exposure was net of these effects.