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Climate change in focus at NAB annual general meeting

By Debabrata Das

08:18, 17 December 2021

The NAB logo outside its headquarters in Melbourne
The NAB logo outside its headquarters in Melbourne – Photo: Alamy

Climate change became the key focal point at the 2021 annual general meeting of the National Australia Bank, as the management reassured shareholders of its green focus.

At the meeting held virtually, the lender’s chairman Philip Chronican faced the ire of shareholders seeking adequate emissions disclosures.

“We have finalised our work to baseline the estimated attributable financed emissions of eight key sectors of our Australian lending portfolio. These are residential mortgages, commercial real estate, agriculture, power generation, resources, heavy manufacturing, transport, and small and medium enterprises. In the next 12 months, we will disclose how we will align our lending to these sectors against the 1.5-degree scenario,” Chronican told shareholders on Friday.

Reducing fossil fuel funding

He also informed shareholders of NAB’s plan to reduce financing of fossil fuels over time and fund the transition of Australia’s energy ecosystem.

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As part of the plan, NAB would not directly finance any greenfield oil extraction project or onboard new customers predominantly focussed on oil extraction. Further, the bank would not lend to new thermal coal mining projects or take on new thermal coal mining customers.

“We have set a target for our exposure to thermal coal mining to be effectively zero by 2030, aside from residual performance guarantees to ensure site rehabilitation,” said Chronican.

Developing carbon credit platform

According to NAB’s managing director and CEO Ross McEwan, the bank was also working towards developing a carbon credits trading platform.

“While removing and reducing carbon emissions is the primary objective, creating a transparent and liquid marketplace for voluntary carbon credits will play an important role in achieving net-zero emissions by 2050. NAB has joined with three international banks to develop a global carbon platform using distributed ledger technology,” said McEwan.

Read more: Australia antitrust body approves NAB’s Citi acquisition

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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