The very real impacts of natural disasters, economic downturns and a global health crisis have made identifying and reducing risks while running a business a complicated task.
Add to that the ever-present and accelerating risk of climate change.
A recent PwC report showed climate change is top of mind for business leaders. Over 70 percent of Australian CEOs see the effects of climate change as a serious threat to their organisation’s growth prospects in 2021.
More than 60 per cent of these CEOs also plan to change long-term investments in Sustainability and Environmental, Social and Corporate Governance (ESG) initiatives over the next three years, in part accelerated by the COVID-19 crisis.
A large component of this change will be the transition to a low carbon future.
This transition is complex. It needs long-term planning, investment into new and existing technologies and the creation of ESG frameworks, disclosures and reporting.
It’s these challenges – and the opportunities generated by the transition – that bankers talk to customers about daily.
More and more, bankers must be financial experts in how businesses can transition over coming years. They are having deeper conversations about the risk-based, commercial decisions companies need to make to prepare for the inevitable net zero emissions world.
NAB is investing in building an Australian team of highly qualified climate bankers who will have this financial expertise.
Over the next 12 months, a group of our corporate and institutional bankers who work closely with our top greenhouse-gas emitting customers will complete a new course developed with Melbourne Business School.
The course will give bankers the best financial skills in climate change and deepen their knowledge of the complexities of the transition and opportunities for future growth, so they can help customers navigate change.
NAB already invests in its bankers through its Career Qualified in Banking Program, a professional qualification that has been developed in partnership with the Financial Services Institute of Australia (FINSIA).
More than 30,000 colleagues will take this FINSIA course over the next four years to refine the skills needed to serve customers and communities well, including the environmental impacts of business operations and sustainable business practises.
Bankers are in the prime position to connect clients focused on ESG initiatives with investors who can fund their goals. This is being done using innovative and tailored products like sustainability-linked loans and green bonds.
NAB has already backed more than a dozen sustainability linked loans for companies that are aligning their debt funding with long-term environmentally and socially responsible targets. NAB is among the top 10 issuers of bonds globally that contribute to addressing climate change.
The Melbourne Business School training will give bankers skills in financial transition pathways that will complement their existing expertise in innovative sustainable financing products.
Expertise in the areas of climate risks, transition pathways and managing climate change conversations with customers are needed by a market in the early stages on the transition. There is a growing awareness that sustainable companies are more resilient to shocks and the pandemic has intensified focus on businesses needing to address environmental and social issues.
Financial regulators have acknowledged climate change is a systemic financial risk which they are incorporating into supervisory frameworks.
Thinking sustainably and using capital in a better way now will support long-term growth and prosperity for Australia in the future. This is good for business. It’s good for job creation in future industries. And it’s also good for Australia.
It’s time to raise the bar in climate change banking professionalism.
David Gall, Group Executive – Corporate & Institutional Banking, NAB
*Published ahead of the Australian Financial Review Banking and Wealth Summit, 30 March 2021