18 December 2019
After record levels of shareholder support for climate risk management resolutions at ANZ and Westpac, it was NAB’s turn today to face the music over its failure to adequately manage climate risk.
Since the Paris Agreement was signed in 2015, NAB has continued to lend heavily to coal, oil and gas, sinking another $6.4 billion into fossil fuels. Last year, NAB’s exposure to fossil fuels grew by a staggering 30% – an action no financial institution serious about meeting the Paris climate goals surely would allow to happen.
This year, hundreds of shareholders signed onto a resolution coordinated by Market Forces, urging NAB to operate in line with 1.5 degrees. School striker Varsha Yajman spoke on the resolution at NAB’s annual general meeting, urging shareholders to vote in favour.
“I’m speaking to this resolution, although I would have preferred it never needed to be lodged in the first place. Sadly NAB’s failure to align its policies with the Paris Agreement goals has made this resolution a necessity and one we all need to support… You will not be forgiven for selling out our future. Not by the tens of thousands of young people taking to the streets and demanding action on climate change. Not by your customers who have given the bank too many last chances to act.”
The resolution received a vote of 12.89% in favour, representing $9.6 billion of institutional backing, and showing a steady increase, year-on-year, of investors calling for greater climate change action from the major banks.
NAB’s policy out of line with 1.5 degrees goal
In November 2019, NAB announced a new commitment to phase out exposure to thermal coal mining by 2035, despite climate science and investors calling for coal power to be phased out completely by 2030 in OECD countries.
Shareholders pointed out the difference, and that NAB was effectively deciding to take action that it knows is consistent with the failure of the Paris climate accord. This point was made by Ambrose Hayes, saying:
“School strikers like myself have spent months challenging the government to get serious about climate change action. NAB has financed enough fossil fuel projects to cancel out the gains that would have been made even with Australia’s pitiful greenhouse gas reduction target. Can you explain to me why young people like me shouldn’t turn our attention to banks like NAB that are undoing any progress made to reduce Australia’s emissions by expanding the fossil fuel industry around the world?”
NAB’s lending to fossil fuels
NAB was also challenged over how it has continued to lend to numerous new fossil fuel projects, including gas power stations and LNG plants in the United States, adding billions of tonnes of greenhouse gas pollution to the atmosphere.
The AGM was taking place in Sydney, which for over a month has suffered from extremely poor air quality as a result of bushfires that have ravaged NSW. As Ambrose commented to the board: “Over the past week air quality readings in some parts of Sydney have been more than 10 times worse than the level deemed hazardous.” Ambrose asked if the board was willing to accept that financing the expansion of the fossil fuel industry will only contribute to conditions that are causing such extreme weather.
Chair Phillip Chronican said the board understood climate change and that it meant they were exposed to more extreme weather events. “It’s impossible to say that the fires…is not in some way related to climate change activity.”
If NAB’s Chronican and NAB’s board truly understand the nature of the crisis and can see how it’s currently affecting people, then why is NAB’s policy not in line with 1.5 degrees?