Within the Group two key businesses (JBWere and BNZ) conduct wealth-related activities.
JBWere recognises it has an important and privileged role to play in Responsible Investment (RI) and helping interested clients to invest responsibly. In July 2021, JBWere launched its new Responsible Investment Policy and Responsible Investing Framework aimed at providing clients with a comprehensive approach to investing for a dual goal: performance and purpose. The RI framework represents the full scope of RI as defined by JBWere, spanning Environmental, Social and Governance (ESG) integration, stewardship of client capital, impact investing, and ethical filters and alignment. Collectively, these pillars align to globally recognised definitions of RI by the Global Sustainable Investment Alliance (GSIA) and reflect global best practice in private wealth.
BNZ’s approach to RI and its Responsible Investment Policy incorporates Environmental, Social and Governance (ESG) factors taken into account in developing and managing investment options.
Climate risk disclosure
Sustainable business is good business. It is our responsibility to make good long-term decisions and help support a strong economy into the future. As part of this long-term approach, sustainability is specifically embedded in our strategy, and includes priorities to tackle some of societies biggest challenges where we are best-placed to make a positive impact, such as climate action.
As a founding signatory of the Principles for Responsible Banking (PRB) and the first Australian bank to join the UN Collective Commitment to Climate Action (CCCA) – which commits NAB Group to aligning our lending portfolio to net zero carbon emissions by 2050 – we want to show industry leadership in making a positive impact on society.
The impacts of climate change and climate-related policy will have a growing impact on our business, our customers and the communities in which we operate, so we believe we have a key role to play in providing finance to assist the low carbon transition.
Highlights from delivering on opportunities within the Group’s climate change strategy in 2021 included:
- Providing a further $1,085 million in financing for renewable energy projects, taking the cumulative value of financing provided for renewable energy projects since 2003 to $11.5 billion. This included financing the Group’s 150th renewable energy financing transaction.
- Progressing the Group’s work with 100 of its largest greenhouse gas emitting customers to support them as they develop or improve their low-carbon transition plans by 30 September 2023. To support this target, the Group developed a transition framework to assess the transition maturity of in scope customers. In 2021, the Group evaluated 34 customers using this framework.
For more information read our environmental agenda, objectives and strategy (PDF, 300KB).
We’ve developed knowledge and understanding of carbon measurement and management through our commitment to carbon neutrality. We were the first Australian bank to achieve this goal and in 2021 we celebrated our 11th anniversary of maintaining carbon neutrality.
A long-standing objective of our climate change strategy has been to learn by doing and then incorporate this knowledge into how we manage environmental, social and governance (ESG) risks, and develop environmental products and services to assist our customers.
We recognise the growing demand for disclosure of information by financial institutions, including banks, to assist investors and other stakeholders to understand carbon risk in lending and investment portfolios.
We are committed to:
- disclosing climate risk information in a manner aligned to the Task Force on Climate-related Financial Disclosures (TCFD) recommendations in NAB Group’s Half and Full Year results reporting over time, taking stakeholder input into account; and
- collaborating with Australian and international banking peers to develop a shared understanding and approaches to climate risk disclosure by financial institutions.
Further information about actions we are taking to deliver on our climate change commitments can be found elsewhere on our website (Climate Change and our Environmental Approach) and in our annual report suite.
We have continued to respond to the CDP Climate Change request.2
We previously participated in the Portfolio Carbon Initiative (PCI) – a joint initiative of United Nations Environment Program Finance Initiative (UNEP FI), the World Resources Institute and the 2 Degrees Investing Initiative – to assist the development of reliable and standardised reporting on carbon-related risk exposure for financial institutions. Reports are available here.
Our portfolio exposures
At 30 September 2021, the power generation sector represented $7.2 billion, or ~0.71% of our total Group net EaD, and of this, 71.4% was from renewable energy.3
Resources exposure represents ~0.9% of our total Group net EaD, with coal specifically accounting for <0.1% of total Group net EaD.
We continue to provide a breakdown by geography and sector of our project finance portfolio in our Equator Principles reporting.