NATIONAL AUSTRALIA BANK LIMITED | Transition Plan Assessments

Status
Withdrawn
AGM date
Previous AGM date
Proposal number
5
Reason withdrawn
"Transition plan (Resolution 5) was not put to the meeting as Resolution 5(a) was not carried."
Resolution details
Company ticker
NAB
Lead filer
Market Forces
Co-filers
Australian Ethical Investment Ltd.
Resolution ask
Report on or disclose
ESG theme
  • Environment
ESG sub-theme
  • Climate change
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Financials
Company HQ country
Australia
Supporting materials
  • 2023-11-ANZ-NAB-WBC-Rolling-Market-Forces-investor-briefing-banks-1.pdf Download
  • Australian Ethical Briefing on the 2023 Australian bank shareholder climate resolutions.pdf Download
Resolved clause
Shareholders recognise the substantial transitional and physical risks of climate change and their potential financial impacts on
our company. Noting our company’s requirement that oil and gas customers have a transition plan in place to receive new lending
and renewals from 1 October 2025(1), shareholders request further disclosure addressing:
1. whether all ‘fossil fuel companies’(2) will be required to have climate change transition plans in place in order for NAB to provide new lending and renewals;
2. whether the restriction on new lending and renewals applies to all ‘new financing’(3);
3. whether NAB will bring its requirement that customers have transition plans forward to 1 January 2025 to match peer timelines(4); and
4. whether and how NAB will assess such transition plans for credible alignment with the 1.5°C goal of the Paris Agreement(5).

Footnotes
1 https://www.nab.com.au/content/dam/nab/documents/reports/corporate/2022-
climate-report.pdf
2 As defined in Science-Based Targets Initiative Fossil Fuel Finance Position Paper
Consultation Draft (https://sciencebasedtargets.org/resources/files/The-SBTi-FossilFuel-Finance-Position-Paper-Consultation-Draft.pdf)
3 Defined as: The provision of new corporate lending, project finance or trade finance
to a customer, including the refinancing of existing facilities, and the arranging or
underwriting of capital markets transactions to a customer.
4 See:
• ANZ Climate Change Commitment
(https://www.anz.com.au/content/dam/anzcomau/about-us/anz-climatechange-commitment-2023.pdf)
• Commonwealth Bank Environment & Social Framework
(https://www.commbank.com.au/content/dam/commbank/about-us/downloadprinted-forms/environment-and-social-framework.pdf);
• Westpac Climate Change Position Statement and Action Plan
(https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/aw/
sustainability/Climate_Change_Position_Statement_and_Action_Plan.pdf)
5 Criteria for determining climate change transition plan credibility include, but are
not limited to:
• Short, medium-and long-term scope 1, 2 and 3 emission reduction targets;
• Strategies (including capital expenditure plans) to align with those targets; and
• No unreasonable reliance on emissions offsets or negative emissions technology
See, for example:
• Climate Action 100+ Net-Zero Company Benchmark
(https://www.climateaction100.org/net-zero-companybenchmark)
• IGCC Corporate Climate Transition Plans Guide
(https://igcc.org.au/wp-content/uploads/2022/03/IGCC-corporate-transitionplan-investor-expectations.pdf)
Supporting statement
Despite committing to the 1.5°C target of the Paris Agreement and net zero global emissions by 2050, NAB continues to finance fossil fuel expansion, undermining these goals, and exposing our company to increased climate-related financial, legal, regulatory, and reputational risks.

NAB therefore has both the imperative and the opportunity to ensure alignment with its climate commitments by addressing crucial gaps in the bank’s currently disclosed approach to fossil fuel lending.

Based on NAB’s current disclosures, NAB will not require most companies in the fossil fuel sector to have climate change transition plans in place before providing further finance. While NAB has stated upstream oil and gas companies will be required to have such plans in place for any “new lending and renewals” from 1 October 202511, the bank has failed to make the same commitment for other fossil fuel sub-sectors [including midstream and downstream clients in the supply chain] – which similarly threaten to undermine the climate goals NAB claims to support. The bank has failed to explain why it would neglect to assess the plans of companies in these other fossil fuel sub-sectors for alignment with the Paris Agreement’s goals before providing further finance.

It is also not clear if the requirement for “new lending and renewals" applies to all the financial products NAB provides its clients, such as bond arrangement, potentially leaving the bank exposed to ongoing financial support for companies actively undermining climate goals.

A clearly articulated commitment and process to assess all fossil fuel customers’ plans for alignment with a 1.5°C warming pathway is required to live up to NAB’s own climate commitments and meet regulator, investor, and community expectations.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Anima Sgr For As the company discloses that it no longer has any corporate lending to thermal coal mining customers or project finance in respect of thermal coal mining assets.
However, there are a number of shortcomings in the company's fossil fuels position statement.

As the bank specifies it "intends" to require a transition plan for oil and gas, thermal coal power generation, and metallurgical coal, and that policy about thermal coal mining does not include diversified mining customers, the level of commitment and the scope remain limited. Furthermore, the bank does not provide a clear distinction in its use of the terms "not financed" and "not directly financed" in its group coal and oil and gas ESG-related settings. There are clear gaps that further disclosure would remedy, and shareholders would benefit from understanding how NAB is addressing increased climate-related financial, legal, regulatory, and reputational risks.

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