Bank shareholders reject climate disclosure for lending

[Pelican Press 0]

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Bank shareholders reject climate disclosure for lending

Activists have failed to amend NAB’s constitution to allow the business-focused bank to consider a non-binding climate change resolution.

The effort received 4.2 per cent of the vote at NAB’s annual general meeting on Wednesday, according to a preliminary tally, with 95 per cent of votes cast against the resolution.

The resolution’s failure was expected, and means shareholders were not officially asked to consider a second resolution for NAB to clearly spell out whether it intends to lend to fossil fuel companies without a “credible” climate transition plan.

That resolution had received 15.4 per cent of the vote, with 84.1 per cent opposed, the preliminary tally indicated.

In 2023 NAB promised it would stop lending to fossil fuel companies without a climate transition plan by October 2025, but the activist group that sponsored the resolution said details have been lacking.

“The request for further disclosure in this resolution boils down to a single question – whether NAB will continue to provide finance to fossil fuel companies that don’t have a Paris-aligned climate transition plan beyond October 2025,” said Market Forces banks campaigner Kyle Robertson.

“Unfortunately, shareholders still do not have a clear answer to this question.”

It’s not clear whether NAB will continue financing the oil and gas expansion strategy of gas company Santos beyond next year, Mr Robertson said.

“NAB is clearly aware of the severe risk from climate change to our economy, our society and our environment,” he added.

“The science is clear that every fraction of a degree warming above 1.5 degrees vastly increases the risk of devastating events.”

NAB chairman Philip Chronican said NAB’s board believed that it was unwise to amend the bank’s constitution so shareholders could take up advisory opinions at annual general meetings.

“It could result in future AGMs being dominated by non-binding special interest resolutions that could be time-consuming in terms of both board management time and AGM time and length,” he said.

NAB’s policy on lending to fossil fuel companies would initially apply to some of the largest customers in power generation, oil and gas and metallurgical coal, Mr Chronican said.

“When an in-scope customer does not have a climate transition plan in place, or is unable to demonstrate progress … we will not provide new or renewed corporate project or trade finance facilities, or facilitate capital market activities,” he said.

NAB’s board considers it best to take an orderly and considered approach to responding to climate change, while acknowledging the important role the bank plays in helping customers decarbonise, Mr Chronican said.

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