NAB is leading the pack on climate change following the release of its 2016 “Dig Deeper” sustainability report, according to environmental finance campaigners Market Forces, but must work to phase out fossil fuel lending.
The bank’s 2016 sustainability report sees engagement in a range of sustainability initiatives, including $7.3 billion to financing activities that address climate change and support a transition to a low-carbon economy, almost halfway to a 2022 target of $18 billion. These commitments include $186.8 million to Green Star commercial offices, $350 in green bonds and $246.3 million in lending to low-carbon businesses.
On the social front there is $48.8 million in community investment, 23,000+ days volunteered, 38 per cent female representation in executive management and more than 200 Indigenous Australians employed.
Important new language
Market Forces said the sustainability report adopted “important new language committing NAB to drastically constrain fossil fuel investment”.
This included acknowledging that “a material decrease” in fossil fuels is necessary to tackle climate change, and recognising the importance of “carbon budgets”.
“We support the internationally agreed goal to limit global warming to less than 2°C above pre-industrial levels,” the report said.
“We expect the transition will lead to a material decrease in the use of fossil fuel-based energy and a corresponding increase in renewable energy. This is based on carbon budgets and energy forecasts by the International Energy Agency and governments including the federal government of Australia.
“We believe this transition will lead to the creation of significant and innovative business opportunities.
“NAB is committed to playing an active role in this transition to a low-carbon economy through our operations and financing activities.”
Market Forces director Julien Vincent said NAB was the only bank to recognise the importance of a carbon budget, which requires limiting the amount of carbon that can be burned to keep below the 2°C limit.
“Acknowledging it is a key step towards turning commitments on supporting the ‘less than 2°C’ goal into real action,” Mr Vincent said.
“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.”
NAB is the only big four bank currently lending more to renewable energy projects than fossil fuels, according to a recent Market Forces report, and lending the least to fossil fuel projects overall.
Mr Vincent said the other major banks were not yet at the point of recognising that the amount of fossil fuels that can be burned must be limited.
“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,” he said.
- Read NAB’s Dig Deeper corporate responsibility report