NAB raises pressure on pollution reduction plans if clients want to access financing

Australia needs a more co-ordinated approach to its net-zero emissions goals, NAB’s Rachel Slade says as the bank raises the stakes for its polluting clients.

NAB’s biggest emitters will need to have transition plans in place by October 2025. Picture: Getty Images

Australia needs to come together on its net-zero emissions goals, National Australia Bank group executive for business banking Rachel Slade says.

Ms Slade said NAB was working with its largest clients in relation to their transition plans but that there needed to be a more collegial approach on the path to decarbonisation.

“There’s no doubt the transition to net zero is going to be a challenge for the government, for the country, for the different industries,” she said.

“We’re engaging with our customers to understand how they’re thinking about it as well. It’ll be a challenge for everyone but we need to all come together on it.

“We’re working with our biggest companies, and they sit in the corporate institutional part of the business, on their transition plans. As they start to emerge, we’ll see what those pathways look like but obviously our climate strategy is working towards net zero by 2050 – with some milestones to 2030 before that.”

NAB group executive for business banking Rachel Slade.

NAB has added to requirements on its big polluting clients, saying they would need to have transition plans in place by October next year if they want to tap the lender for capital markets activities, including bond financing.

NAB in November last year said these emitters would need transition plans in place by late 2025 if they wanted to access new or renewed corporate lending or project-level lending.

Extending the requirement to capital markets means these clients will not be able to tap NAB for bonds, including sustainability-linked bonds, corporate bonds and syndicated loans, if they don’t get their transition plans up to scratch.

The move leaves ANZ Bank as the laggard among the big four, as Commonwealth Bank and Westpac last year put limitations on bond financing.

Australian Conservation Foundation corporate campaigner Jonathan Moylan said NAB’s updated policy had a clear message for polluters.

Jonathon Moylan of the Australian Conservation Foundation. Picture: Craig Greenhill

“As of next year, corporate polluters will need to adopt science-aligned pathways to decarbonise if they want to access loans or bonds from NAB,” he said.

“The increasing focus on bonds and other capital market activities that fuel dangerous climate change is significant, given it is a greater source of debt for fossil fuel companies than corporate loans.”

Market Forces banks campaigner Kyle Robertson noted the update from NAB but said the lender was still giving the green light to fossil fuel infrastructure companies.

“Some of NAB’s fossil fuel infrastructure clients like APA Group are exempt from this framework despite their role in one of Australia’s biggest new proposed fracking gas developments, in the Northern Territory,” he said.

Business leaders on Wednesday put a question mark over the need for blanket net zero pledges by corporate Australia, arguing it was not realistic for every company or sector to meet targets seen as central for combating climate change.

Westpac business banking boss Anthony Miller said it would be impossible for some entities to achieve net zero status, but that others could pick up the slack to get the country to its 2050 target.

Originally published as NAB raises pressure on pollution reduction plans if clients want to access financing