Environmental approach

Climate change

We recognise the direct contribution our business can have to climate change and the impact climate change can have on our business, customers and suppliers.

Natural capital and biodiversity

We recognise a healthy environment is essential to healthy people and business.

Managing our environmental impact

Taking a sustainable approach to managing our business is not just important for the environment, it’s essential for the long-term growth and resilience of our organisation. 

We understand our economy depends on a healthy environment.

Our policies

Our objective to manage our environmental impact is guided by our Group Environmental Management Policy (PDF, 274KB), opens in new window and Group Environment Reporting and Offset Management Policy (PDF, 251KB), opens in new window. 

A sustainable approach to the way we do business isn't only good for the environment, it makes us more resilient. It's part of our strategy and plan for long-term growth. 

Our environmental management practices are aligned to the ISO14001 Environmental Management System standard and provide a consistent framework across our business. We implement environmental management practices in each region we operate in, taking into consideration differences in regulatory requirements and operating practices. Further information on our environmental certifications is included in our 2023 Sustainability Data Pack (XLS, 1MB), opens in new window.

Governance 

Environmental risks are identified, measured, monitored, reported and overseen in accordance with our Risk Management Framework, as described in our Risk Management Strategy. They are also reflected in our Risk Appetite Statement and relevant supporting divisional credit appetite strategies, ESG-related policies and management practices. Executive management’s Group Credit and Market Risk Committee oversees ESG risk, including climate and human rights-related risk, given a significant part of our exposure to these risks is through lending to customers.

Since 2017, our climate change disclosures have been structured to align with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). In 2023, TCFD disclosures have again been provided in our standalone 2023 Climate Report (PDF, 3MB), opens in new window, which also includes further detail on how we manage risks presented by climate change within our Risk Management Framework.

Updates on environmental risks are provided to the Executive Risk and Compliance Committee, Board Risk and Compliance Committee and Board. Further information on our material exposures to environmental risks is set out in ‘Disclosure on risk factors’ in our 2023 Annual Report (PDF, 9MB), opens in new window. Environmental sustainability is a core part of our long-term business strategy, supported by environmental specialists working in our Risk, Sustainability, Strategy and Innovation, Sustainable Finance, Hybrids and Equity Capital Markets, Specialised Finance, Agribusiness, Equipment Finance, Property and Procurement teams.

Environmental sustainability requirements are also embedded into our policies, standards and management frameworks, including our building design and operating standards, and our risk management framework.

Having the big conversations

We have a role to play in advocating on environmental issues.

We’re engaging in meaningful conversations about environmental issues with our colleagues, customers, government, industry peers, business and the broader community. This includes information sessions and workshops, taking part in consultation on policy developments and joining industry initiatives. 

Internationally we participate in working groups as part of our United Nations Environment Programme Finance Initiative (UNEP FI) membership. We continue to work with other UNEP FI member banks on methodologies and processes to implement the recommendations of the Financial Stability Board’s TCFD. We’re also a member of the Taskforce on Nature-Related Financial Disclosures Forum.

As a signatory to the Net Zero Banking Alliance, in 2022 NAB set interim 2030 sectoral decarbonisation targets for our lending portfolio in four of our most emissions-intensive sectors: power generation, oil and gas, thermal coal mining and cement production. In 2023 we have set further interim 2030 sectoral decarbonisation targets for our aluminium, iron and steel and aviation sector lending portfolios.

We also participate in Australian climate-related risk activities and projects to better understand and implement methodologies to assess and manage climate risk. In 2023 this included:

• UNEP FI TCFD programme – capacity-building for transition plan development, updates from specific regulators on climate stress testing activities, and a working group reviewing of a range of physical and transition risk tools and data sets for climate- related risk analysis.
• Climate Measurement Standards Initiative (CMSI) – work continued on identifying industry technical data that would assist CMSI partners to manage their TCFD-related climate disclosures. NAB has supported this cross-sector industry initiative since it formed in 2020. The CMSI includes representatives from across the banking, insurance and investment sectors alongside pre-eminent Australian climate scientists working together under the auspices of the National Environmental Science Program, professional services firms and finance sector industry bodies. The objective of the CMSI is to provide open-source voluntary guidance on climate risk.
• Australian Banking Association (ABA) – NAB participated in a range of banking industry-related climate risk capability building activities through ABA working groups. This included:
  • Climate Risk Working Group - which developed industry guidance on climate risks for member banks.
  • Financed Emissions Working Group - which developed member guidance on calculating financed emissions for residential mortgage portfolios.
  • Scenarios Taskforce - which developed the scope for, and commenced work on, bank guidance on scenario analysis for use in climate-related stress testing.
• Australian Sustainable Finance Institute (ASFI) – NAB is a founding member of the ASFI, and was a member of its predecessor body, the Australian Sustainable Finance Initiative. In 2023, NAB participated in a number of ASFI working groups and activities, including:
  • preparatory work for development of an Australian sustainable finance taxonomy (NAB participated in the Steering Committee for this preparatory work during 2023 and now NAB colleagues have been appointed to the Taxonomy Technical Expert Group and the Do No Significant Harm’ Technical Advisory Group); and 
  • natural capital.

NAB Group is also a member of a range of global finance sector and industry-led initiatives, and we’re signatories to or have pledged support for a range of voluntary corporate standards and principles. See memberships and benchmarking to learn more. 

Engaging our colleagues

We’re continually working to increase the environmental awareness of our colleagues and embed this knowledge throughout the business.

As part of this awareness, we’ve incorporated Environmental, Social and Governance risk into our internal risk compliance training. Building on training provided to our Corporate and Institutional and Agribusiness bankers to better support customers to decarbonise and build climate resilience, in 2023 we launched bank-wide climate training which was co-designed between NAB and the Melbourne Business School. 

We use a range of channels, like our internal social media, intranet, email updates and video, to communicate with our colleagues about our climate and environmental initiatives.

Reporting and performance

We have set environmental targets and report annually on our progress against these. Read more about our performance in our 2023 Climate Report (PDF, 3MB), opens in new window and 2023 Sustainability Data Pack (XLS, 1MB), opens in new window.