Case study: How NAB works with its clients and customers to encourage sustainable practices

Stakeholder identification and consultation

Please describe which stakeholders (or groups/ types of stakeholders) you have identified, consulted, engaged, collaborated or partnered with for the purpose of implementing the Principles and improving your bank’s impacts. This should include a high-level overview of how your bank has identified relevant stakeholders, what issues were addressed/results achieved and how they fed into the action planning process.

Effective stakeholder engagement enables NAB to better understand expectations, potential challenges, and opportunities for improvement. In 2023, NAB continued its engagement efforts with stakeholders through its ESG Materiality assessment and in key impact areas.

• NAB’s approach to stakeholder engagement is outlined in its Social Impact Policy and is guided by the AA1000 Stakeholder Engagement Standard.
  • The annual materiality assessment includes inquiries regarding stakeholders’ perspectives on how NAB can enhance its positive contributions and mitigate its negative impacts.
  • NAB systematically identifies and engages with key stakeholders, with a well-established process in place. For instance, stakeholders are consistently consulted when NAB reviews important policies.
  • NAB is actively involved in various partnerships and industry initiatives covering a wide range of topics, including natural capital, sustainable agribusiness, climate risk and scenario analysis, and a just transition to a low-carbon economy.
  • NAB also engages with policymakers on issues such as climate change, biodiversity, modern slavery, affordable housing, and other sustainability challenges, either through industry associations or directly. Some specific examples from 2023 include:

– Collaborating with the Australian Banking Association (ABA) on the proposal put forth by the Federal Department of Treasury regarding the implementation of standardized, internationally-aligned climate-related financial disclosures.
– Participating in the UNEPFI Taskforce on climate-related financial disclosures (TCFD) forum, which involves reviewing tools and datasets being developed for climate-related risk analysis.

For further details on NAB’s stakeholder engagement approach, please refer to page 23 of the 2023 Annual Report or visit its website.

How did NAB work with its clients and customers to encourage sustainable practices and enable sustainable economic activities?

In its 2023 PRB Reporting and Self-Assessment Template NAB reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:

Climate Change
NAB outlines its relevant policies, frameworks, and processes for engaging with customers regarding climate change in the 2023 Climate Report.

A crucial element of NAB’s climate strategy involves assisting customers in their decarbonization efforts. In 2023, NAB achieved its goal of conducting transition maturity assessments for 100 of its largest greenhouse gas-emitting customers, utilizing a Transition Maturity Diagnostic aligned with global frameworks such as the Transition Pathway Initiative, which evaluates companies’ readiness to shift to a low-carbon economy. Building on this initial assessment, NAB has prioritized incorporating criteria into decision-making for sectors where it has established specific decarbonization targets. For further details on this process and its findings, please refer to page 12 of NAB’s 2023 Climate Report.

In 2023, NAB appointed its first Chief Climate Officer, who reports to the Chief Financial Officer, and began recruiting additional personnel to support a comprehensive approach in advancing NAB’s climate strategy.

Affordable and Specialist Housing
NAB has increased its commitment to affordable and specialist housing by announcing a new target to lend an additional $6 billion by 2029, enabling more Australians to access such housing. This follows the successful completion of a previous $2 billion target in 2022, ahead of the 2023 deadline. In 2023, NAB provided $2.2 billion in financing toward this goal. The financing has been significantly supported through NAB’s partnerships with Australian State and Federal governments. For additional information about NAB’s activities in this area, see section 2.1 (d) of its PRB self-assessment and page 29 of NAB’s 2023 Annual Report.

Indigenous Economic Advancement
In 2023, NAB set a new goal to more than double its lending to Indigenous businesses and community organizations, aiming for $1 billion by December 31, 2026. This initiative is part of NAB’s broader suite of Indigenous targets, which are managed through its Reconciliation Action Plan (RAP). NAB is currently developing a new three-year RAP for 2024-2026 and has created an Indigenous business banking team with representatives in each state to provide specialized knowledge and resources to support Indigenous business outcomes.

For more information on NAB’s activities in this area, see section 2.1 (d) of its PRB self-assessment and page 28 of NAB’s 2023 Annual Report.

Partnerships, Advocacy, and Associations
NAB’s stakeholder engagement approach, which includes consultation processes on sustainability topics, is detailed in its Social Impact Policy and is guided by the AA1000 Stakeholder Engagement Standard. Relevant activities are described on page 23 of its 2023 Annual Report.

UN Principles for Responsible Banking: Accelerating a positive global transition for people and the planet

With over 300 signatory banks representing almost half of the global banking industry, the Principles for Responsible Banking are the world’s foremost sustainable banking framework. Through these Principles, the banking community takes action to align core strategies, decision-making, lending and investment with the UN Sustainable Development Goals and international agreements such as the Paris Climate Agreement.

FBRH Principles for Responsible Banking (PRB) Assurance:

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The combination of all the above empowers FBRH to provide first class Principles for Responsible Banking (PRB) assurance services.

References:

This case study is based on published information by NAB, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://www.nab.com.au/content/dam/nab/documents/reports/corporate/principles-for-responsible-banking-self-assessment.pdf

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