NAB Wealth offers hundreds of investment choices to clients because we know everyone has different ideas about how their money should be managed. Socially Responsible Investments (SRI) funds managed within NAB Wealth and externally, are included in these choices.
NAB Wealth believes that environmental, social and governance (ESG) factors are a source of potential risk in its investment portfolios and should be managed prudently. NAB Wealth’s investment managers – a number of whom are Principles for Responsible Investment (PRI) signatories – are in the best position to evaluate the extent to which good corporate governance and a sustainable business approach are conducive to delivering long-term investment performance and the management of risk in their funds. That includes important impacts such as ESG factors.
Further information on funds under management in SRI funds can be found in our Sustainability Data Pack (XSLX, 866KB).
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.
That’s why we continue to be Australia's leading arranger of project finance to for Australian renewable energy1. 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 2020 we celebrated our 10th 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.
Our climate disclosure commitment is one of our climate change commitments. Read further information about our climate change commitments.
In 2020, we undertook the following activities to deliver on our climate change disclosure commitment. See our Sustainability Report (PDF, 2MB) for further information.:
- United Nations Environment Program Finance Initiative (UNEP FI) Phase 2 pilot project on the Task Force on Climate-related Financial Disclosures (TCFD). Outcomes and reports from the pilot to date can be found on the UNEP FI website.
- Energy Transitions Hub: We have continued to work with the University of Melbourne to develop a robust process to overlay physical climate risk information on the Group’s lending portfolio for scenario analysis.
- Climate Measurement Standards Initiative [CMSI]: We have joined and supported this cross-sector initiative. Reports are available here.
- Climate-KIC Australia: NAB has been working with Climate-KIC Australia and other organisations on an Adaptation Finance Project. The project report can be found here.
- Continued to provide disclosures on lending to the agricultural, energy and natural resources sectors. See our Investor Presentations and our Sustainability Report (PDF, 2MB). This includes:
- Continued to respond to the CDP Climate Change request2.
- 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 2020, the power generation sector represented $7.4 billion, or ~0.83% of our total Group net EaD, and of this, 72% was from renewable energy3.
Resources exposure represents ~1.04% of our total Group net EaD, with coal specifically accounting for <0.2% 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.