Co-ordinated approach to net zero

National Australia Bank

The below is an edited version of remarks made by NAB CEO Ross McEwan at the third Treasurer’s Investor Roundtable in Canberra on Tuesday, 5 December 2023.

Thank you for the opportunity to provide a few thoughts today.

I’ll share the approach NAB is taking with our customers and the importance of a coordinated approach to get Australia where we need to go.

NAB and its customers

We are spending a lot of time speaking with customers in many different industries who are addressing climate change.

They are taking the transition seriously – and see the opportunities.

Earlier this year, we completed transition maturity assessments for 100 of our largest greenhouse gas-emitting customers. The assessment showed transition maturity varies across industries and some sectors will definitely need more help than others.

Our climate report this year included interim 2030 decarbonisation targets for lending to aluminium, iron and steel, and aviation. They build on the decarbonisation targets set last year for our lending to power generation, oil and gas, thermal coal mining and cement production.

We continue to work on developing decarbonisation targets for our lending to other critical sectors, all in line with necessary legislated time-frames.

There is much work ahead for us, just as there is for businesses around the world.

Government action

We see the Government’s development of sectoral decarbonisation plans and pathways as key enablers for transition, and would welcome fast progress on this front. The ability to work together with Government is critical to Australia’s success in managing the transition.

It has been tough for businesses and sectors to make decarbonisation decisions and investments without this whole-of-economy clarity.

Knowing where the Government lands on actions needed to reduce emissions in each sector would assist greatly in this work. So too will consistent corporate disclosure requirements and a uniform approach to company transition plan development.

These would ensure transparency and reduce complexity, against the risk of banks and government having similar but varied requirements on industry. It can strengthen investor confidence to guide where financial institutions could best allocate financing to help meet the net zero target.

We stand ready to share insights and expertise with Government on sectors where we have already set targets, and have had constructive discussions with Minister Bowen’s Net-Zero Departmental Taskforce.

We also want to learn from the Government’s approach to decarbonisation plans and sectoral pathways, as we set further targets of our own. Particularly for sectors that are harder to abate, such as agriculture and the built environment.

Moving forward

In August, we released modelling with Deloitte Access Economics that shows using Australia’s natural advantages in solar, wind and critical minerals could add up to $435 billion to the national economy by 2050.

It showed that what we achieve from now to 2030 is critical and Australia needs to act quickly to set up our economy to capitalise on the opportunity before us.

It’s great to be here today and I look forward to the conversation.

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