NAB shareholders call for bank to plug climate transition plan gaps
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The news: National Australia Bank shareholders are calling for stricter disclosures on their customer climate transitions plans and have put forward resolutions to be voted on at the company's annual general meeting (AGM).
The context: The resolutions call for further disclosure to address the "critical gaps" in the bank's current disclosures around its climate-based "customer transition plans".
In November 2023, NAB announced that it intended to require a customer transition plan for corporate and institutional banking customers from 1 October 2025. This would require the majority of fossil fuel extraction companies to have Paris-aligned climate transition plans in place in order to provide additional lending.
The resolution, which will go to vote at NAB's AGM on 18 December, said that "shareholders recognise the substantial transition and physical risks of climate change and their potential financial impacts on our company".
It said: "Noting there remain critical gaps in our company's current disclosures regarding customer transition plans, shareholders request further disclosure addressing:
- Whether a customer will be eligible for 'new financing' from our company if its customer transition plan is not credibly aligned with the 1.5°C goal of the Paris Agreement; and
- Whether our company's Customer Transition Plan requirements will extend to all 'fossil fuel companies' as defined by the Science Based Targets Initiative".
NAB's announcement did not mention which individual shareholders had tabled the resolution. At last year's AGM, shareholders voted on a Market Forces resolution calling for the bank to tighten up its policy on which fossil fuel clients it lends to.
Science Based Targets Initiative is a corporate climate action organisation that has developed standards, tools and guidance that allow companies to set greenhouse gas emissions reduction targets to reach net zero by 2050.
NAB said it expects to publish its notice for the AGM in mid-November, which will contain the proposed resolutions, together with the board's voting recommendations.
If passed, the resolution would bring NAB into line with Commonwealth Bank, which specified in its 2024 climate report that it required transition plans from all customers involved in oil and gas extraction, and metallurgical coal mining, who derive more than 15% of their revenue from the sale of these commodities. The policy also applies to power generation clients who derive more than 25% of their revenue from coal-fired power.
CBA's policy, last updated in August, is based on third-party advice the bank received from Climate Action 100+ Framework, which is based on a 2°C warming scenario, and as such is less stringent than the SBT- which is aligned with the 1.5°C goal of the Paris Agreement.
