The Facts: NAB’s Lending to Fossil Fuels



NAB Chief Climate Officer Jacqueline Fox responds to Market Forces’ recent report and stands-by NAB’s goal to achieve net-zero.

The following comments are attributable to NAB Chief Climate Officer, Jacqueline Fox.

“As a member of the Net-Zero Banking Alliance we have a goal to align our operational and financed emissions with pathways to net-zero by 2050, and have set 2030 financed emissions reduction targets for power generation, thermal coal, oil and gas and cement. We’re working now with our customers to achieve this, as we set targets for other sectors by May next year. The targets we have set cover project and corporate lending to these sectors.

“The report released by Market Forces and its methodology doesn’t reflect NAB’s current exposure to fossil fuel projects or the progress we’re making with our customers in the transition to net-zero.

“NAB’s financed emissions are measured and in line with global practice. We believe they provide an accurate picture of our climate-based risks, and opportunities, as we work towards net-zero.

“Financed emissions reflect emissions per dollar in lending, allowing us to track the bank’s contribution to decarbonisation over time. The data we provide to market is carefully prepared and reviewed to ensure its accuracy.

NAB’s 2022 Climate Report discloses our exposures to high emitting sectors and details how our financing activity supports the transition to net-zero by 2050, which I encourage all our stakeholders seeking to understand our approach to read.

“In relation to thermal coal mining specifically, since March 2020, NAB’s exposure has reduced by 50% to $371 million as of 31 March 2023. Over the same period, our lending to renewable energy in our power generation portfolio increased 13% from $5.4bn to $6.1bn.

“The data that NAB was provided, which this report relies on, referred to a number of transactions as ‘fossil fuels’ or part of the ‘coal value chain’, including transactions and companies involved in rail transport, major infrastructure, steel manufacturing, industrial processes, diversified power generation companies with significant renewable portfolios and others.

“Of particular note, the data did not distinguish between thermal coal used for power generation versus metallurgical coal used for steel production, for which there is currently no readily available substitute.

“These sectors are critical to Australia in a net-zero world, and we are working with our customers to provide capital that supports investment to decarbonise and diversify operations.

“Climate change is a significant risk to the planet and a major challenge for society to address – we acknowledge there is a lot of work to do. As a bank, our role is to support our customers and communities through the transition and fund the investments needed to create a strong and sustainable future for Australia.”


Facts about NAB’s lending to coal and oil and gas industries

  • NAB’s target is to reduce its thermal coal mining exposure to effectively zero by 2030, aside from residual performance guarantees to rehabilitate existing thermal coal assets. Since March 2020, NAB’s thermal coal mining exposure has reduced by 50% to $0.37bn (at 31 March 2023).
  • Close to one quarter of this exposure is for guarantees NAB provides on behalf of customers to ensure that companies rehabilitate existing coal mine sites at the end of operations.
  • NAB is not directly financing any new thermal coal mining projects – and has not since 2015.
  • NAB is not taking on new thermal coal mining customers.
  • NAB is not directly financing new or material expansions of coal-fired power generation facilities.
  • The thermal coal mining target does not include metallurgical coal mining customers.
  • NAB recognises there are no readily available substitutes for the use of metallurgical coal in steel production. Emissions related to metallurgical coal mining are intended to be reported in the ‘Iron and Steel’ sector and will be included in a separate target expected to be released by May 2024.
  • NAB has also capped oil and gas exposures[1] at USD2.4bn, put in place restrictions on oil and gas financing, and has set a target to reduce emissions from its lending to this sector.
  • NAB continues to be the number one Australian bank for global renewables transactions[2].


Net-Zero Banking Alliance (NZBA)

  • NAB became a signatory of the Net-Zero Banking Alliance (NZBA) in late 2021. The NZBA is an industry-led and United Nations-convened project which brings together a global group of banks committed to aligning their lending and investment portfolios with net-zero emissions by 2050.
  • It’s the flagship climate initiative under the UN Principles for Responsible Banking, requiring signatory banks to set interim targets for 2030 or sooner by using robust, science-based guidelines.
  • NAB has set interim targets for power generation, thermal coal, oil and gas and cement as they represent the majority of financed emissions in the lending portfolio. IEA’s Net Zero Emissions 2050 scenario used as the reference scenario for all four initial targets.
  • NAB will set further interim sector-level targets by May 2024, consistent with NZBA requirements.



[1] Oil and gas EAD includes oil and gas extraction (upstream); liquefied natural gas (LNG) production (not at refineries – downstream LNG); and LNG production at wellhead (integrated LNG). EAD for these caps includes lending, derivatives and performance guarantees for the rehabilitation of existing assets.
[2] Rankings based on IJGlobal League Table MLA, Renewables, both cumulative data from 1 Jan 2010 to 31 December 2022 and for the 12 months ending 31 December 2022



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