National Australia Bank Ltd.

RATING

SECTOR

Banking

WEBSITE

CONTACT

800 Bourke Street, Docklands
Melbourne
Australia

Tel: 011 61 3 8641 9083
Fax: N/A
Email: info@nab.com.au

STOCK EXCHANGE

LISTING

  • World’s Best Banks 2020
  • #191 Global 2000 2020
  • #490 Sales
  • #333 Profit
  • #64 Assets
  • #362 Market Value

EMPLOYEES

34,370

 

CHIEF SUSTAINABILITY OFFICER

No CSO or equivalent listed.

 

AWARDS

The company does not disclose any awards.

CONTENT SOURCE

FURTHER READING

Report created by Maribel Sabino

 

National Australia Bank Ltd.

SECTIONS :  Sustainability  •  Targets    Evaluation   •  Key Points  •  Overview

 

Company Activity

National Australia Bank LTD engages in banking and financial services. These services include banking, credit and access car facilities, leasing, housing and general finance, international banking, investment banking, wealth management, funds management and custodian, trustee and nominee services.

The company operates through five segments: Consumer Banking & Wealth, Business & Private Banking, Corporate & Institutional Banking, NZ Banking, and Corporate Functions & Other.

Company Sustainability Activity

National Australia Bank states it is committed to serving its customers well and helping its communities prosper for years to come. NAB has taken the responsibility to make good long-term decisions and help support a strong Australian economy into the future.

NAB has developed a long-term approach to addressing sustainability and is included in the NAB Group Strategy. The Group Strategy, explained in depth in National Austalia Bank’s Annual Review, sets out for over the next five years:

  • Safe: protecting customers and colleagues through financial and operational resilience.
  • Easy: an easier, more seamless and digitally-enabled bank that gets things done faster.
  • Relationship-led: building on market-leading expertise, data and insights.
  • Long-term: delivering sustainable outcomes for its customers, colleagues, and communities.

Since 2003, NAB has already provided $33.6 billion in environmental financing to help customers address climate change and support the transition to a low-carbon economy. In the world, NAB is the 13th largest lender to the renewable energy industry and Australia’s number 1 bank for global renewables transactions.

NAB is also a member of the 130-bank group from the world as the inaugural signatories of the UN Global Compact Principles for Responsible Banking. They have committed $4 billion in financing innovation in the technology sector and to help address Australia’s social and affordable housing crisis.

The long-term approach is inclusive of NAB’s focus on sustainability, and its determination to tackle some of society’s biggest challenges where the bank is best-placed to make the most positive impact. This includes responding to natural disasters, taking action on climate change, and building financial health and resilience.

Highlights

Funding for the Future

  • $2BN financing in affordable and specialist housing by 2023.
  • $2BN financing in emerging technology by 2025.

NAB’s economic value distributed

  • $15.9BN payments to the government, suppliers, shareholders, colleagues, and the community.
  • $42.8m in community investments.
  • $5B committed to supporting customers, colleagues and communities impacted by the bushfires, including $3.6m in support for impacted customers and colleagues and in emergency relief donations; $1.4m directed towards longer-term community recovery efforts.

Targets

Environmental Financing

  • NAB’s environmental financing commitment is to provide $70 billion to help address climate change and support the transition to a low-carbon economy by 2025.

Supporting Customers

  • Strategic NPS: Positive and #1 of major banks.
  • $2 billion in financing to support affordable and specialist housing by 2023.
  • $2 billion in financing to help emerging technology companies and innovators grow by 2025.
  • Continued focus on driving inclusive banking through actions outlined in NAB’s Accessibility Action Plan, Reconciliation Action Plan, Customer Vulnerability Framework.

Governance, conduct and culture

  • Roll out new conduct management program.
  • Embed ‘How We Work’ and guidance in all colleague performance plans.

Colleague capability and wellbeing

  • At each salary level, 40–60% of either gender represented.
  • Gender pay equity <10% by 2025.
  • Monthly digital learning target of 8,000 to 10,000 hours.
  • 8,000 colleagues to be trained through the ‘Career Qualified in Banking’ program every year for the next three years.
  • All People Leaders to complete Distinctive Leadership program, with all colleagues completing an introductory module as well.

Managing Climate Change

  • Align NAB’s lending portfolio to reflect and finance the low-carbon, climate-resilient economy required to limit global warming to well below 2 degrees, striving for 1.5 degrees Celsius.
    • The bank is undertaking portfolio analysis which will support the alignment of its lending portfolio with the Paris Agreement and help it achieve a net-zero emissions portfolio by 2050.
    • NAB is supporting current coal-fired power generation customers by implementing transition pathways aligned with the Paris Agreement goals of a 45% reduction in emissions by 2030 and net zero emissions by 2050.
    • NAB will not finance new or material expansions of coal-fired power generation facilities unless there is technology in place to materially reduce emissions. 
    • The company has capped thermal coal mining exposures at 2019 levels, reducing by 50% by 2028 and intended to be effectively zero by 2035, apart from residual performance guarantees to rehabilitate existing coal assets. NAB now expects its thermal coal mining exposure to reduce by 50% by 2026, and to be effectively zero by 2030. NAB will not take on new-to-bank thermal coal mining customers.
    • NAB is continuing its phased review of carbon-intensive, climate-sensitive and low-carbon sectors with an Oil and Gas sector review intended for completion in 2021.
  • Take concrete action, within a year of joining, to use NAB’s products, services and client relationships to facilitate the economic transition required to achieve climate neutrality.
    • NAB has set a goal to deliver $70 billion in environmental financing by 2025 and delivered $42.5bn to date. 
    • The bank will source 100% of its energy from renewable energy sources by 2025 and has set a Science-Based Target to reduce GHG emissions by 51% by 2025. 
    • NAB will work closely with 100 of its largest greenhouse gas emitting customers to support them in developing or improving their low carbon transition plans by 2023.
  • Be publicly accountable for NAB’s impact and progress on these commitments.
    • The bank has submitted its first return to the UNEP FI, reporting on NAB’s progress against the CCCA commitments.
    • NAB will continue to report regularly on the company’s approach to climate change, reporting on its progress semi-annually, and in alignment with TCFD recommendations.
  • 100% electricity from renewable sources by 2025.
  • 51% carbon emissions reduction by 2025.
  • 30% energy reduction by 2025.
  • 50% reduction in energy from the use of vehicle fuels by 2025 (Aus & BNZ only)
  • 10% waste to landfill reduction by 2025
  • 5% water reduction by 2020
  • 20% office paper reduction by 2025
  • 70% reduction in emissions from staff air travel by 2025 (BNZ only)
  • Supporting customers to achieve net-zero emissions, and achieving a net-zero emissions portfolio by 2050.

Partnerships and advocacy

  • Achieving net-zero emissions by 2050 by actively engaging in a range of partnerships designed to support customers with their transition plans, improve knowledge and understanding, drive consistency and transparency, and encourage meaningful robust public policy. 

Progress

Progress against environmental financing commitment

  • 2020: $8.9BN
  • Cumulative total since 2015: $42.5BN

Commercial responses to society’s biggest challenges

  • Supporting a low-carbon economy, driving investment in natural assets, helping people reduce financial stress, and creating more sustainable and inclusive communities.

Resilient and sustainable business practices

  • Managing environmental, social and governance (ESG) risks and opportunities responsibly, and creating Australia’s leading ESG capability.

Innovating for the future

  • Driving investment in new, emerging and disruptive technologies, and partnering with customers, industry and government on critical thought leadership and disaster response initiatives.

Australian Industry Energy Transition Initiative (AIETI)

  • In 2020 NAB, alongside a number of customers joined the AIETI. The AIETI aims to accelerate informed action by Australian industry towards the achievement of net-zero emissions in hard-to abate sectors by 2050 while managing the transition to thrive in a decarbonized global economy.
  • AIETI will focus on five supply chains that are critical to achieving the Paris Agreement goals (that is, keeping temperatures ‘well below 2°C’ and pursuing efforts to limit the temperature increase to no more than 1.5°C’) given their significance to global emissions and the relatively higher abatement costs associated with them. The supply chains identified by the AIETI are iron and steel, liquefied natural gas, other metals (lithium, cobalt, etc), aluminum, chemicals, in particular plastics, fertilizers, and explosives.

Sustainable Impact Finance

  • In 2020, NAB continued its market-leading role, participating in 12 public green, social and sustainability bond deals, one sustainability linked US Private Placement (USPP), two Climate Bond Certified green loans and two sustainability-linked loans.
  • Acting as a Lender and Joint Lead Sustainability Structuring Arranger on the Coriance Sustainability-linked Loan.
  • Acting as a Joint Lead Agent & ESG Structuring Agent on the Sydney Airport $100m 20-year U.S. private placement (USPP) ESG-linked tranche. This sustainability-linked USPP is Australian and world-first.

Financing sustainable infrastructure projects

  • NAB’s Project Finance (PF) portfolio plays a big role in supporting Australia and New Zealand’s long-term, sustainable growth by helping develop key infrastructures like schools, roads, and power plants. NAB continues to be Australia’s leading arranger of PF for Australian renewable energy, helping its customers and community make the low-carbon transition.
  • NAB’s current global portfolio of renewable energy projects represents a total generation capacity of 13,684 MW and the bank has arranged $10.2 billion worth of loans since 2003.
  • In 2020, NAB financed an additional 4,303 MW of installed renewable energy generation capacity through renewable energy projects – including finance for wind and solar assets in Australia, US, and the UK.
  • This year, the aggregate estimated share of the total Scope 1 and 2 greenhouse gas (GHG) emissions from the Australian designated power generation assets4 in NAB’s PF portfolio is around 23,351 tCO2-e (295,330 tCO2-e in 2019).

Managing Climate Change

  • $42.5BN in Environmental Financing Since 2015
  • 72% of power generation EAD invested in renewables
  • 10YRS Certified Carbon Neutral 
  • Only Australian Bank to sign Collective Commitment to Climate Action.
  • Supported the research and launch of the climate measurement standards.
  • 60% reduction in paper usage from 2015 baseline.
  • 41% reduction in science-based GHG emissions from 2015 baseline.
  • $10.2 billion worth of renewable energy transactions completed since 2003.
  • $33.6 billion raised of the $70 billion goal for 2025.
  • GHG emission reduction of 18% (target of 21% reduction by 2025).
  • Energy use: 12% reduction goal was 5% by 2020.

Certificates

UN Sustainable Development Goals

UN SDGs Compliance

SDG 5: Gender Equality

  • 40% – 60% of either gender represented at all levels of the business by 2020.
  • 50% female overall (2020).
  • 36% female in executive management (2020).

SDG 7: Affordable and Clean Energy

  • Source 100% of Group electricity consumption from renewable sources by 2025.

SDG 8: Decent Work and Economic Growth

  • Provide 19,000 microfinance loans to Aboriginal and Torres Strait Islander customers by 2021 (baseline year 2019).

SDG 9: Industry, Innovation and Infrstructure

  • $2bn financings for local emerging technology industry by 2025 (baseline 2020).

SDG 10: Reduced Inequalities

  • 70 Indigenous Australian traineeships offered per year.
  • Spend $2.6 million with Indigenous businesses by 2021 (baseline year 2019).

SDG 11: Sustainable Cities and Communities

  • $2bn financing in affordable and specialist housing by 2023 (baseline 2020).

SDG 12: Responsible Consumption and Production

  • 90% of material suppliers comply with its Global Supplier Sustainability Principles.
  • 100% of new/re-contracted suppliers in sensitive sectors assessed for ESG risks each year.

SDG 13: Climate Action

  • Recognize that carbon risk and their role in the transition to a low-carbon economy are increasingly important to their stakeholders and the community.
  • Provide $70 billion in environmental financing over 10 years
  • Cap thermal coal mining exposures at 2019 levels, reducing by 50% by 2028 and intended to be effectively zero by 2035, apart from residual performance guarantees to rehabilitate existing coal assets

Secondary SDGs: 16

Evaluation

National Australia Bank is committed to serving its customers well and helping its communities prosper for years to come. As the largest bank in Australia, they have the capital means and responsibility of leading the industry as a whole in Australia as well as New Zealand. 

NAB has laid out strict guidelines as to how they approach the next few years and becoming a more sustainable financial institution. The bank has complied with both the Global Reporting Initiative (GRI) and Task Force for Climate-related Financial Disclosures (TCFD). 

National Australia Bank has made significant progress, reaching its environmental financing goals. The bank has tackled how they manage climate change within their firm. Instead of slowly transitioning to become more sustainable, NAB had gone headfirst into becoming an example of how to operate.

Since 2003, NAB has already provided $33.6 billion in environmental financing to help customers address climate change and support the transition to a low-carbon economy. In the world, NAB is the 13th largest lender to the renewable energy industry and Australia’s number 1 bank for global renewables transactions.

NAB has explicitly stated its compliance with the United Nations Sustainable Development Goals, clearly outlining specific targets, progress and plan to achieve the bank’s goals. 

National Australia Bank has been rated a B.

Analyst Outlook: Neutral

Despite NAB’s clear commitment to sustainability, the bank lacks certificates and awards that would enforce its initiatives.

Key Points

Share this Post