Case study: How NAB takes action on its PRB targets: climate change, affordable and specialist housing and indigenous economic advancement

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, identify potential issues, and discover opportunities for improvement. In 2024, NAB continued its engagement efforts through its ESG Materiality assessment and by focusing on its priority impact areas.

• NAB’s approach to stakeholder engagement is outlined in its Sustainability Policy and is guided by the AA1000 Stakeholder Engagement Standard.
• The annual materiality assessment includes questions about stakeholders’ perceptions of how NAB can enhance its positive impacts and mitigate negative ones.
• NAB has a well-established process for identifying and engaging with key stakeholders; for instance, stakeholders are regularly consulted during reviews of major policies.
• NAB participates in various partnerships and industry initiatives across multiple topics, including natural capital and biodiversity, improved outcomes for First Nations peoples, sustainable agribusiness, climate risk and scenario analysis, and a just and inclusive transition to a low-carbon economy.
• The bank also engages with policymakers on issues such as climate change, biodiversity, modern slavery, affordable housing, and other sustainability concerns through industry associations and direct interactions.

For more details on NAB’s stakeholder engagement approach and specific examples from 2024, please refer to page 21 of the bank’s 2024 Annual Report, NAB’s website, and page 14 of the 2024 Climate Report.

What actions were taken by NAB on its PRB targets, climate change, affordable and specialist housing and indigenous economic advancement?

In its 2024 PRB Reporting and Self-Assessment Template NAB reports that it took the following actions on its PRB targets, climate change, affordable and specialist housing and indigenous economic advancement:

• SMART Target 1: Climate change
•  In NAB’s 2021 Annual Review, the bank first announced its intention to establish and publish emissions reduction targets for the majority of its Australian lending portfolio. Since then, NAB has joined the NZBA and is setting sector decarbonisation targets aligned with pathways to reach net zero by 2050, aiming to limit global warming to 1.5°C above pre-industrial levels by 2100. As part of this commitment, NAB has established twelve interim sectoral decarbonisation targets (‘sector targets’) for its lending across eight high-emitting sectors, with five of these targets set in 2024.
• Moreover, NAB has set facilitated emissions targets for fossil fuel sectors—such as power generation, oil and gas, and thermal coal—in line with the updated UNEP FI Guidelines. Sector decarbonisation targets encompass approximately 70% of the financed emissions resulting from NAB’s total lending activity. Details on these targets, including baseline data, can be found on pages 9-22 of NAB’s Supplementary Climate Disclosures and pages 41-68 of the 2024 Climate Report. The 2024 Climate Report also reports progress against NAB’s 12 sector decarbonisation targets and acknowledges that the bank is still in the early stages of implementing these initiatives. For further information, see the Metrics and Targets section starting on page 42 of NAB’s Climate Report.
• Key activities in 2024 to advance progress toward these decarbonisation goals included:
  • Enhancing the Customer Transition Plan (CTP) assessment framework for a targeted group of customers.
  • Expanding NAB’s risk and governance capabilities, as well as increasing investments and partnerships to strengthen market support for customer transitions.
  • Rolling out new sector-specific e-learning climate training programs for NAB employees, complementing existing climate foundational and risk e-learning based training programs. Additional details on these activities are available in NAB’s 2024 Climate Report.

• SMART Target 2: Affordable and specialist housing
• In 2024, NAB allocated $2.1 billion in financing toward its goal of lending at least $6 billion to help more Australians access affordable and specialist housing by 2029. Since the target’s inception at the end of 2022, NAB’s cumulative progress reached $4.4 billion in 2024.
• Section 2.1 (d) of NAB’s self-assessment outlines the actions taken in 2024, including financing initiatives, partnerships, and advocacy efforts aimed at supporting homeownership for essential workers, younger Australians, and individuals on low incomes. It also describes ongoing efforts to deepen NAB’s understanding of the impact in this area. For further details, see page 29 of NAB’s 2024 Annual Report.

• SMART Target 3: Indigenous economic advancement
• NAB’s total lending to First Nations business and community organizations increased by over 11%(1) to $463.8 million in 2024 and continues to advance toward NAB’s $1 billion target by December 2026. The bank has further expanded its network of specialized business bankers across the country and is actively building relationships to support funding for First Nations businesses and community organizations to promote their economic development.
• As outlined in Section 2.1 of NAB’s self-assessment, the NAB Foundation funded research in 2024 to explore opportunities for Indigenous businesses, as well as the structural barriers to growth, including the role of the financial system. In 2025, NAB plans to deepen its understanding in this area, including how to define and measure the impact of its initiatives.
• NAB’s other targets aimed at fostering greater economic prosperity for Indigenous Australians are detailed in NAB’s RAP (2024-2027). The NAB RAP Council, composed of senior executives, monitors progress against these targets. The bank has centralized program funding and created dedicated roles within the First Nations Affairs, Procurement, and People & Culture teams to drive progress and impact.
• For more information, see NAB’s 2024-2027 RAP and page 28 of NAB’s 2024 Annual Report, which provides additional details on NAB’s activities in this area.

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.

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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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