National Australia Bank Ltd (ASX: NAB) has responded to an open letter from several climate-focused organisations urging it to stop lending towards new fossil fuel projects.
At the time of writing, the NAB share price does not appear to have been adversely affected by any criticism within the letter. It's currently 1.08% higher than yesterday's closing price, swapping hands for $27.17.
The open letter was also sent to 2 other big banks: Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC).
Let's take a closer look.
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Open letter to big banks
Among the letter's signatories are the Australian Conservation Foundation, the Australian Centre for Corporate Responsibility, the Climate Council, Greenpeace Australia Pacific, and GetUp.
In the letter, the group pointed to the findings of the International Energy Agency's (IEA) Net Zero by 2050 report, released last month. Commissioned as a roadmap for the global energy sector, the report describes itself as "the world's first comprehensive study of how to transition to a net-zero energy system by 2050".
The organisations have called on NAB, the Commonwealth Bank, and Westpac to stop financing gas projects in Australia. They pointed to the Scarborough project in Western Australia as an example of a project that shouldn't receive bank financing.
The Conservation Council of Western Australia found Woodside Petroleum Limited (ASX:WPL) and BHP Group Ltd's (ASX: BHP) Scarborough project could be Australia's most polluting development.
Additionally, the organisations assert the banks should remove all their investments in oil and gas projects by 2030, saying:
As leaders of the Australian banking sector you have committed to align your lending portfolio with the Paris Agreement and achieve net zero emissions by 2050…
The IEA report states that investment in new fossil fuel supply is inconsistent with the pathway to net zero emissions…
We call on you to update your lending policies so they are in line with the IEA net zero emissions by 2050 pathway and the latest climate science.
In its response, NAB stated it was currently reviewing its financing of oil and gas projects. The results of the internal review will be announced later this year.
The bank said the review would consider the IEA's report. It also stated its executive leadership team has met to discuss its findings.
NAB share price snapshot
The NAB share price has performed well on the ASX lately.
Currently, the NAB share price is 18% higher than it was at the start of 2021. It's also gained 44% since this time last year.
