Australian businesses and climate change risk

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Ninety per cent of Australian small to medium business owners have expressed concern about climate change risk and the environment, with more than 70 per cent revealing their view on climate change had changed since the bushfires according to NAB research presented today to the Clean Energy Council.

This research was undertaken in mid-February 2020, just prior to the unprecedented impacts of COVID-19 on Australian SMEs.

Business operators in recreation and personal services (51%), education (50%) and agriculture (47%) had expressed the most significant concern about climate change, with the largest change in attitude recorded in Tasmania (84%) and New South Wales (81%).

Other key findings in the report included:

  • 55 per cent of business owners intend to switch to renewable energy sources;
  • 51 per cent of business owners intend to switch to greener equipment and infrastructure;
  • 7 in 10 SMEs recognise their customers expect their business to act to address climate change and have expectations that they are acting in a sustainable way, such as reducing waste and plastics use, reducing energy consumption and emissions, and switching to renewable energy sources; and
  • 4 in 10 businesses agree banks should increase specific support to renewable energy sector.

NAB Group Executive – Corporate and Institutional Bank David Gall said the research showed climate change was a risk to the environment and a challenge for businesses.

“We know the impacts of climate change and climate-related policy are having a growing effect on our business, our customers and the communities in which we operate,” Mr Gall said.

“In the 2019 financial year, NAB increased our environmental finance commitment to support green infrastructure, capital markets and asset finance from $20 billion to $35 billion – this will take our total environmental finance commitment from $55 billion to $70 billion by 2025. And when we consider the findings of this research, this financing commitment matters.”

“Over 60 per cent of surveyed business owners told us that banks should do more overall, rising to 2 in 3 among small to medium enterprises (SMEs) in vulnerable bushfire areas.”

Mr Gall said NAB had now arranged over AUD$10 billion in renewable energy project finance.

“Since 2004, NAB has backed more than 130 domestic and global transactions involving wind farms and solar parks,” Mr Gall said.

“We’re proud to have played a vital role in an emerging economy that supports Australia and New Zealand’s growth, and this has continuing relevance in a post COVID-19 world. This is the time to make long-term business decisions focused on resilient and sustainable principles,” Mr Gall said.

NAB’s[1] other climate commitments to date include the raising of almost A$4.5 billion[2] through green and social bonds, in addition to bringing another 25 green, social and sustainability bonds to market for clients across Australia and New Zealand.  This included Australia’s first retail green term deposit offering for UBank and NAB’s first green residential mortgage-backed security.

Other recent examples include numerous sustainability-linked loans and green asset backed securities for customers.

View the full version of the NAB SME Bushfire Impact Survey here.

 

[1] NAB or NAB related entities

[2] $A equivalent as at 31 December 2019 using RBA Historical Daily Exchange rates

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