Ken Henry calls out Business Council on climate; refuses to rule out Bight oil and gas projects

Today at the NAB AGM Dan Gocher, Director of Climate and Environment at the Australasian Centre for Corporate Responsibility (ACCR) asked Chairman Ken Henry two questions (see below). His comments are:

The Business Council of Australia

“NAB Chairman Ken Henry personally rejected the Business Council of Australia’s unfounded assertion that an emissions reduction target of 45% by 2030 would be “economy wrecking”, becoming the first BCA member to publicly distance itself from the remarks. Dr Henry’s comments are welcome and signal a desperately needed shift in the ‘business as usual pro-coal politics’ in Australia.

“Dr Henry is well aware of the BCA’s long running opposition to sensible climate policy, given he proposed an emissions trading scheme as Treasury Secretary under the Howard Government.

“The Business Council of Australia and the Minerals Council are increasingly being sidelined by investors who are fed up with the carbon lobby’s toxic influence and Australia’s energy and climate deadlock.

“The impact of the IPCC 1.5 report on the financial services sector, regulators, and policy makers cannot be underestimated. We have been warned that we only have 12 years to take urgent and drastic action to reduce emissions to avoid the catastrophic impacts of climate change.

The Great Australian Bight

“It is simply nonsensical that NAB has restricted lending to oil and gas projects in the Arctic and Antarctic, but will not apply the same restriction to the Great Australian Bight.

“NAB will be well aware of the deepwater drilling rig that spewed millions of litres of oil into the Gulf of Mexico, causing an environmental catastrophe. The Great Australian Bight waters are deeper, more treacherous and more remote than the Gulf of Mexico.

“NAB would be wise to heed the call of 12 South Australian local governments, representing 550,000 residents, who have voted their opposition to oil exploration in the Bight.

“There is ample evidence that any accident in the Bight would decimate a haven for 36 species of whales and dolphins, including the world’s most important nursery for the endangered southern right whale, a nursery for the endangered Australian sea lion and Australia’s largest fishing industry.

“Oil and gas drilling in the Bight poses an unacceptable risk to both the natural environment and NAB’s social licence to operate in South Australian communities.

“Norway’s Equinor may be willing to risk one of the Australia’s untouched wildlife refuges, but Australian banks certainly should not.

END

QUESTIONS

1. In a media release on 18 October, NAB stated that it was committed to ensuring that its industry associations advocate for policy aligned with the Paris Agreement. NAB is a member of the Business Council of Australia. The BCA has claimed that the Labor party’s emissions reduction target of 45% by 2030 would be “economy wrecking”, and lead to “deindustrialization”. Does the board agree with this view, and if not, has it sought to change it?
2. On page 7 of the 2018 Sustainability Report, it states that NAB has reviewed its lending to the oil and gas sector, concluding that it will no longer finance “tar sands extraction projects, and oil and gas projects within or impacting the Arctic National Wildlife Refuge area and any similar Antarctic Refuge”. Why has NAB not applied a similar restriction on lending to oil and gas projects within the Great Australian Bight, given it too is one of Australia’s few unspoiled wildlife refuges?

ANSWERS

Answer to Q 1

Dr Henry: We are a member of the Business Council of Australia and we seek to influence the views of the Business Council of Australia  through discussions within the Business Council of Australia rather than in public forums like this.

But I will say this, I personally do not agree with that statement.

The policy of the bank is to be fully supportive of the Paris Agreement and the commitment to securing global warming of less than 2 degrees.

I think that’s an appropriate question to ask of a company. Do you align with that higher level goal? That’s an appropriate question to ask. But I don’t think it’s a productive question to ask of boards whether they agree with every statement made by an industry representative of an industry association that the business belongs to.

I’ve given you my view but I can’t give you the view of the board.

Answer to Q 2

Dr Henry: There are no proposals before the bank that I’m aware of that would have the bank consider extending finance to projects of the sort that you are referring to.

We have made the commitments with respect to the Arctic and the Antarctic, but with respect to the south of Australia there are no propositions in front of us that I’m aware of that would require us to form a judgement.

Dan: I can’t imagine there are propositions regarding lending in the Antarctic either. Dr

Henry: Ha! Good point! I’ll take it on notice

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