Investors owning $9.74 billion of shares in Australia's largest agribusiness bank have backed a resolution calling on NAB to disclose deforestation linked to its lending.*
The resolution on disclosure of financed deforestation, facilitated by the Australian Conservation Foundation and co-filed by SIX, Australian Ethical, Melior Investment Management, was supported by 13.98% of shares voted at NAB's AGM today.
A second resolution, calling on the bank to set out a strategy to eliminate financed deforestation, was supported by 10.39% of NAB shares voted.
Jolene George, head of corporate advocacy at the Australian Conservation Foundation, said:
"The support for the resolution on disclosure of financed deforestation is above the global average support for nature-related proposals and demonstrates that investors increasingly recognise the economy's dependence on nature.
"Analysis by ACF has found NAB's exposure to deforestation is higher than any other Australian bank, despite improving its approach to monitoring and responding to instances of illegal deforestation.
"A bank cannot afford to ignore the views of 14% of its owners.
"It's up to the bank to address the risks that accompany its exposure to deforestation."
Phoebe Rountree, campaign manager at SIX, said:
"The NAB board can't ignore today's message from shareholders: it's time to lead on eliminating deforestation from NAB's portfolio. It's disappointing that shareholders had to force the issue of deforestation onto the agenda.
"Banks shouldn't finance the destruction of Australia's unique forests and the wildlife that call these places home. Doing so passes the risk onto their own shareholders and the whole community.
"We urge the board to embrace the opportunity offered by shareholders. Don't let shareholders be standing in this same position in 12 months' time. Step up to address your role in financed deforestation now."
Changes to federal law legislated last month mean proposals to bulldoze forests that are more than 15 years old now require assessment under the national environment law (if the proposal will affect matters of national environmental significance).
This raises compliance risks associated with exposure to deforestation and increases expectations that banks will not have links to deforestation, regardless of its legality.
UN guidance on companies' net zero pledges requires no deforestation, regardless of legality. As a signatory to the Glasgow Leaders Declaration on Forests and Land Use, Australia has committed to conserve and restore forests and terrestrial ecosystems.
* Number of shares voted in favour (235,434,931) x share price ($41.38)
