National Australia Bank has announced it will set a “science-based target” to reduce its emissions by 21 per cent of 2015 levels by 2025.
The bank said its new target was in line with the goal set at the Paris COP21 to limit global warming to less than two degrees above pre-industrial levels.
It will cover direct greenhouse gas emissions (Scope 1) as well as indirect greenhouse gas emissions from electricity, heat or steam (Scope 2), though not emissions from data centres.
The news may raise a few eyebrows as NAB was recently called out in a Market Forces report for “making a mockery of the Paris Agreement” due to continued lending to fossil fuel projects.
As an example, in the report NAB was called out for facilitating an inter-company loan that was claimed to allow the expansion of Hunter Valley’s Wambo coal mine.
However, it was also noted that NAB was the only big four bank that lent more to renewables projects than to fossil fuel projects.
According to NAB head of environmental sustainability Nicola Murphy, the financial sector can play a large role in the transition to a low-carbon economy.
“The impacts of climate change and climate-related policy are having a growing effect on our business, our customers, and the communities in which we operate,” Ms Murphy said.
“The setting of science-based targets is another way NAB continues to deliver on its commitment to take a leadership role in making the transition to a low carbon future.”
Businesses and government organisations, most recently the City of Melbourne, are increasingly signing up to science-based targets, many as part of the Science Based Target initiative, which is helping organisations to set targets in line with climate science.
For Australia, the Climate Change Authority has recommended 30 per cent reduction target on 2000 levels by 2025, and a 40-60 per cent reduction by 2030.
NAB’s Scope 1 and Scope 2 emissions will be sent to the Science Based Target initiative for informal review, but because Scope 3 emissions (indirect emissions that aren’t covered by Scope 2) are not included it will not be formally recognised.
Ms Murphy said Scope 3 emissions were not included because there was currently no standard framework or agreed methodology for science-based targets for finance-related activities.
If applied, Scope 3 emissions could include lending and underwriting portfolios, which could greatly inflate emissions profiles.