2022 Climate Report

Acknowledgement of Country
NAB acknowledges Australia’s First Nations peoples as the Traditional Custodians of the
land and their continuing connection to country, sea and water. We pay respect to their
Elders past, present and emerging. We make this acknowledgement with the ambition to
continue supporting a reconciled Australia through our actions and voice.
Contents
Our approach to climate change 2
Our approach to
climate change
Governance 3
Role of the Board and Committees 3
Management’s role in assessing and managing climate- 4
related risks and opportunities
Sustainability and NAB's Performance Framework 4
Governance
Strategy 5
Supporting customers to decarbonise and build resilience 6
Investing in climate capabilities 9
Risk management 12
Strategy
Risk management processes 12
ESG risk and policy settings 14
Assessing potential climate risk using scenarios 15
Metrics and targets 19
management
Exposure to high emitting sectors 19
Risk
Understanding financed emissions 20
Reducing financed emissions 21
Environmental financing target 34
Reducing operational emissions 35
and targets
Supporting information 38
Metrics
TCFD Index 38
Methodologies 40
Assurance 53
Understanding this report 54
information
Supporting
Glossary 55
Important information
The Group's 2022 Climate Report ('Report') contains statements that are, or may be deemed to be, forward looking
statements, including climate-related goals, targets, pathways and ambitions. Such forward looking statements are not
guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which
are beyond the control of the Group. This may cause actual results to differ materially from those expressed or implied in
such statements. There are uncertainties, assumptions and judgements underlying climate-related metrics that limit the
extent to which climate-related metrics are useful for decision-making and you are cautioned not to place undue reliance
on the information in this Report. The measures and forward-looking statements in this report reflect the Group’s best
estimates, assumptions and judgements as at the date of the report, however, the uncertainty in climate-related metrics,
methodologies and modelling may lead to the Group changing its views in the future.
NAB’s New Zealand banking subsidiary, BNZ, has separately joined the Net Zero Banking Alliance (NZBA) and is in the process
of sectoral target development, in line with the time frames set out by NZBA. Sections 'Reducing financed emissions'
(pages 21-33), 'Financed emissions methodology' (pages 40-45) and 'Target setting baseline methodology' (pages 46-49)
relating to NAB’s participation in the NZBA and sectoral decarbonisation pathways excludes BNZ from both the baseline
and the targets. The Group intends to align NZBA reporting as metrics and methodologies develop and as idiosyncratic
country considerations permit.
2022 Climate Report 1

Our approach to climate change
Climate change is a significant risk to the planet and a major challenge for society to address.
At the same time, opportunities are emerging as the transition to net zero occurs. NAB is
supporting customers to decarbonise, build their climate resilience and help achieve the goals of the
Paris Agreement.
The Group's climate ambition is to act as a catalyst for Natural disasters caused deep harm in communities across
climate action, supporting emissions reduction and aligning Australia in 2022. Recognising that the impacts of climate
with pathways to net zero by 2050, consistent with a maximum change will increase the frequency and severity of natural
temperature rise of 1.5°C above pre-industrial levels by 2100. disasters, the Group will continue to work on offerings to
This approach is underpinned by core beliefs: support customers, colleagues and communities to withstand
and recover from natural disasters.
• Climate transition can create growth for the economy.
Complementing product innovation, 'NAB Ready Together' is
• Management of climate transition is core to the Group's NAB's program to bring together philanthropy, volunteering
business, not an adjacency. and investment in nature-based solutions to build resilience.
• The Group will be relationship-led, supported by strong Refer to page 45 of NAB's 2022 Annual Report for detail on
enabling capabilities. 'NAB Ready Together'.
• External targets will be science-based and aligned with a
growth strategy.
Climate action is everybody's job and the Group is playing
its part. The challenge is formidable, and the Group still
has work to do to embed climate considerations
throughout the bank. Refer to the 'Strategy' section for
detail on the Group's climate strategy.
Progress in 2022
Supporting customers Investing in Reducing Reducing

to decarbonise and climate capabilities financed emissions operational emissions
build resilience
$70.8bn
Total cumulative flow
>300 4
Four interim sector
74%
Reduction in Scope 1 and
Agribusiness colleagues
of new environmental supported with decarbonisation targets 2 emissions compared to
finance provided since climate training set for 2030 2015 baseline(3)
1 October 2015(1)
73% 72%
of NAB's electricity
of the Group's lending to consumption sourced
power generation is to from renewable energy(4)
renewable energy(2)
(1) Refer to page 34 'Environmental financing target' for further detail.

(2) NAB methodology (based upon the 1993 ANZSIC codes) at net Exposure at Default (EAD) basis. Excludes exposure to counterparties predominantly involved in
transmission and distribution. Vertically integrated retailers included and categorised as renewable where the majority of their generation activities are sourced from
renewable energy. NAB has no direct lending to coal-fired power generation assets remaining, however there is indirect exposure to coal-fired power within the Mixed
Fuel category as a result of NAB’s corporate level exposure to gentailers, which have a mix of generation assets (including coal, gas and renewables) within their
generation portfolio.
(3) Significant progress towards the Group’s 2025 science-based target has been demonstrated since 2020, however, performance has been influenced by COVID-19 and
it is not expected that all of the reductions achieved to date will be permanent. The Group will review this target in 2023. Includes net operational Scope 1 and 2
greenhouse gas (GHG) emissions, and 2021 and 2022 figures calculated using a market-based approach.
(4) NAB’s operational environmental measures are reported on a 1 July - 30 June performance period - the Group's environmental reporting year. Progress towards NAB’s
RE100 target has been influenced by COVID-19 and a resultant decrease in electricity consumption. The Group does not expect all progress achieved to date to
be permanent.
2 National Australia Bank

Governance
The Board oversees sustainability-related risks and opportunities, including climate and nature-
related risks.
Our approach to
climate change
Figure 1: Summary of sustainability (including climate) governance
Governance
Strategy
management
Risk
(1) The Group’s major subsidiary, BNZ, also has sustainability-related (including climate) management groups and councils.
Details on BNZ’s approach to relevant governance matters will be available in its climate and sustainability reporting.
(2) NAB’s Indigenous Advisory Group is comprised of representatives from the Board, Executive Leadership Team and
Aboriginal and Torres Strait Islander leaders from outside NAB.
Role of the Board and Committees • Financed emissions estimate and interim sector
and targets
Metrics
decarbonisation targets.
The Board retains oversight of environmental, social and
governance (ESG)-related matters including climate change. • 2022 Task Force on Climate-related Financial Disclosures
ESG considerations are integrated into business strategy, aligned disclosures.
operations and risk management.
Board capability
The Board is supported by the Board Risk & Compliance
Each year, NAB assesses the skills and experience of each
Committee (BRCC) which has accountability for oversight of
director and the combined capabilities of the Board. The
the Group’s risk profile and risk management. This includes
insights from this assessment are documented in a skills
information
Supporting
climate risk, within the context of Board determined risk
matrix that is:
appetite, although ultimate responsibility for risk oversight,
risk appetite and risk management rests with the Board. • Considered in the context of NAB’s business and its
strategic needs.
The BRCC refers all matters of significant importance to the
Board, making recommendations to the Board concerning the • Incorporated into Board succession planning and the
Group’s current and future risk appetite, risk management selection of new directors.
strategy and particular risks or risk management practices, • Used to inform areas of focus for the Board’s continuing
including those related to climate change. education and use of external expertise.
The Board and BRCC regularly (at least quarterly) receive To prepare the skills matrix, each director rates their skills,
reports on climate-related matters which may include expertise and experience against several competency areas
strategy, goals and targets, risks and opportunities, ESG- that are then mapped to the skills matrix. The self-assessment
related credit policy and appetite settings, environmental ratings and skills matrix are reviewed and calibrated by the
operational performance, scenario analysis and stress Board Nomination & Governance Committee on behalf of the
testing, climate-related regulatory change and reporting Board. The current skills matrix is provided in the 'Corporate
submissions and concerns raised by stakeholders. Governance Statement' section of NAB's 2022 Annual Report. In
In 2022, key climate-related matters presented to the 2022, the Board assessed its combined skills and capabilities
Board included: from an environmental and social perspective as strong.
• Climate-related appetite and tolerances included in the In 2022, the Board Nomination & Governance Committee
Group Risk Appetite Statement (RAS). and Board continued to prioritise increasing the combined
capabilities of the Board on environmental and social
• Climate strategy update.
topics (including climate change) in its continuing
• NAB's Climate Vulnerability Assessment. education priorities.

Governance (cont.)
The Board development program included sessions on Sustainability and NAB's

climate action (risks, opportunities, transition opportunities, performance framework
target setting methodologies and practices).
The Group's performance, including that of the Group CEO,
is assessed on achievement of financial and non-financial
Management’s role in assessing
measures as set out in the Group Performance Indicator (GPI)
and managing climate-related risks framework. The GPI is determined by, and linked to, the Group’s
and opportunities key strategic priorities. The GPI incorporates a qualitative
Members of the Executive Leadership Team (ELT) have assessment to support any adjustments to the outcome.
a key role driving the implementation of the Group’s The GPI also informs a Variable Reward (VR) multiplier which
climate strategy and in assessing climate-related risks and directly impacts the level of variable reward paid to colleagues
opportunities. The ELT consider (and endorse to Board) participating in the Group Variable Reward Plan.
matters relevant to the Group’s climate strategy and key
climate-related goals and targets. This includes relevant The qualitative assessment in the GPI is integral to
targets required due to the Group's participation in the NZBA. the outcome and may result in the outcome being
adjusted upwards or downwards (including to zero) for risk,
The Group Executive, Strategy & Innovation is accountable quality of performance (including consideration of financial,
for the design and execution of the Group's strategic climate sustainability, environmental and social impact matters, and
ambition. In 2022, the Group created a Chief Climate Officer progress made against strategy) and any other matters as
role (recruitment under way) to report to this Group determined by the Board.
Executive and drive this work.
In 2021, the Group formally incorporated ESG risks, including
The Group Chief Risk Officer (GCRO) is accountable for climate change, as a material risk category called
integration and management of climate risk within the ‘Sustainability Risk’ in the Group's Risk Management
Group’s Risk Management Framework and practices. Framework. Effective management of these risks forms part
The Group Chief Operating Officer (GCOO) is Chair of the of the Board’s qualitative assessment of the GPI. Colleagues'
Sustainability Council, which is responsible for aligning individual performance plans may also contain climate-
activity across the Group and overseeing progress against specific goals and performance indicators where relevant to
the Group's broader sustainability goals and targets. The their roles (for example, within teams focused on executing
GCOO provides updates on the Group’s sustainability the Group's climate strategy).
performance to the Board. Refer to the 'Remuneration Report' section of NAB's
The Group Executive, Technology & Enterprise Operations, 2022 Annual Report for information on how the annual
is accountable for NAB’s property portfolio, technology VR is calculated, informed by the measures in the GPI,
operations, Financial Crime Operations and supply chain together with a qualitative assessment of other factors
management. This includes managing risks and opportunities and individual performance.
arising from capital works and operational programs that
help reduce NAB’s energy use, GHG emissions and other
environmental impacts and power purchase agreements to
help meet the Group's renewable energy target.
Management Committees
The Group Credit and Market Risk Committee (GCMRC),
and where relevant, the Executive Risk and Compliance
Committee or ELT, help oversee aspects of the Group's
climate strategy, risk appetite and management, policies,
and performance. These committees review aspects of
climate change-related performance.
The GCMRC oversees ESG-related matters, including those
related to climate change. It reviews matters including risk
appetite, risk profile, limits, portfolio exposures, credit
policies and compliance with ESG-related obligations
(including climate-related regulatory requirements, voluntary
initiatives, goals and targets).
The Group's Sustainability Council meets bi-monthly to review
sustainability-related matters, and align activity to the long-
term pillar of NAB's strategy. In 2022, key areas of focus for
the Sustainability Council included:
• Climate strategy.
• NAB's interim sector decarbonisation target-setting
approach.
• Aligning activity to support NAB's Indigenous business
strategy.
• Improving the Group's controls related to sustainability
initiatives and targets.
Refer to page 20 of the Group's 2022 Annual Report for
detail on how sustainability is integrated into business
strategy.

Strategy
The Group's climate strategy aligns to its strategic ambition to serve customers well and help our communities prosper.
With an over-arching goal of net zero emissions by 2050, the Group is working to support its customers as they decarbonise
Our approach to
climate change
and build climate resilience, while creating prosperity for customers, colleagues and communities.
Climate strategy
The Group's focus remains unchanged, taking a relationship-
The Group updated its climate strategy in 2022. The climate
led approach that prioritises supporting customers to
strategy is designed to maximise the climate transition's
decarbonise and build resilience.
economic benefits for customers and NAB, and help to
achieve emissions reduction targets consistent with a However, the refreshed climate strategy aims to further
maximum temperature rise of 1.5°C above pre-industrial levels embed consideration of climate change into the Group's
Governance
by 2100. businesses, and deliver a whole-of-bank response to
climate change.
The Group is acting now for the long-term, with the strategy
requiring immediate actions to support achieving targets well When appointed, the Chief Climate Officer role, reporting
into the future. to the Group Executive, Strategy and Innovation, will drive
execution of this strategy.
Figure 2: NAB's climate strategy priorities
Strategy
management
Risk
and targets
Metrics
information
Supporting

Strategy (cont.)
Supporting customers to decarbonise and build resilience

The Group is adopting a whole-of-bank approach to climate change, developing its offering across
business units to support customers to reduce their emissions.
Corporate & Institutional Bank (C&IB) This includes through the operationalising of interim sector
decarbonisation targets (see page 25 for detail). It is
C&IB is building on its efforts to support some of the
important that consistency and comparability is developed in
economy's largest businesses with their climate transition,
how financial services institutions assess transition plans. In
recognising the significant impact their transition can have
that context, the Group welcomes the recently published
in reducing emissions in the economy. C&IB will support its
NZBA Transition Finance Guide.
customers to decarbonise and build resilience by:
• Funding renewable energy projects, customers and
supply chains. Case study: Reliance Rail Sustainability-
• Funding power generation transition. linked loan
• Funding decarbonisation of operations. As a major part of Sydney’s transport, Reliance Rail
• Supporting customers to participate in carbon markets. is playing its part in decarbonising Australia’s mobility
system through financial innovation that sets ambitious
Supporting customers' transition targets for reducing energy and water usage for its
NAB has completed transition maturity assessments for 86 electric fleet and maintenance centre.
of its largest GHG emitting customers using its Transition In 2022, NAB partnered with Reliance Rail to help them
Framework Diagnostic (see Figure 3 below). NAB intends to align their financing with their sustainability ambitions,
complete assessments for 100 of its largest customers by through a landmark $1.8 billion green sustainability-linked
30 September 2023. Results so far suggest that: loan (GSLL). The GSLL is set up as a 21-year refinancing
• All customers assessed have acknowledged climate package certified as "green" by the Climate Bonds
change as a business issue. Initiative under its Low Carbon Transport criteria. Under
the GSLL, funding margins are linked to sustainability
• 67% are relatively transition mature, scoring within Band
performance, and any savings generated under the loan
3 (27%) and Band 4 (40%), noting some variation across
can only be used to fund sustainability improvements.
industries (See Figure 3).
NAB acted as a joint sustainability co-ordinator,
• 76% are already reporting or have committed to report in
lender and swap provider for the deal and assisted
alignment with TCFD.
in developing the green and sustainability-linked
• 63% have set a goal to be net zero by 2050 or sooner. framework and certification of the loan. As Reliance Rail
The diagnostic provides a mechanism to track customer supplies and maintains rolling stock that makes up about
transition maturity and assists NAB to support customers a third of the Sydney Trains suburban passenger fleet,
in their transition, including through products such the transaction has the potential to support significant
as sustainability-linked financing. The transition maturity sustainability improvements.
assessment process has provided the Group with an initial
understanding of the transition maturity of its customers. The
Group intends to build on its transition maturity assessment
capability as it continues to work with customers to support
their transition efforts.
Figure 3: Transition maturity of 86 assessed customers, by sector

Strategy (cont.)
Leadership in sustainable financing Business and Private Bank (B&PB)
Our approach to
climate change
The Group is building products to provide customers B&PB is developing sustainable business banking products and
with solutions that assist them in achieving sustainability services, with an initial focus on agribusiness customers in
objectives. Key progress in 2022 included: recognition of the significant risks and opportunities related
• $11bn raised for customers through green, social, to climate change in the agriculture sector. B&PB will support
sustainability and sustainability-linked bonds(1) supported by its customers to decarbonise and build resilience by:
the Group. • Funding decarbonisation of operations.
• $22bn raised for customers through green, social and • Funding sustainable farming.
sustainability-linked loans(1) , supported by the Group.
• Increasing the resilience of customers.
• NAB remains the number one Australian bank for global
Governance
• Supporting carbon projects and access to carbon markets.
renewables transactions(2).
• Funding emerging green technology.
Environmental financing target • Providing access to sustainable investments.
In 2022, the Group achieved its target to provide $70bn
in environmental financing ahead of the 2025 target date. Supporting agribusinesses
Since 1 October 2015, the Group has provided the following
Agribusiness Green Loan Pilot
environmental finance(3):
In November 2021, NAB launched the pilot phase of its
• $40.7bn to support green infrastructure, capital markets
Agri Green Loan, a product designed to help agribusiness
and asset finance.
Strategy
customers invest in eligible on-farm practices and projects
• $30.1bn to provide mortgage lending for new dwellings that reduce GHG emissions, and/or build resilience against
and significant renovations for 6-Star residential housing climate-related risk.
in Australia.
The NAB Agri Green Loan is a tailored business loan to finance
Refer to page 34 in 'Metrics and Targets' for more specific activities aligned to the independent framework
information on the Group's Environmental Financing Target. and categories set out under the Climate Bonds Standard
Agriculture Criteria(4). Projects funded may:
Connecting customers to carbon markets
management
• Reduce business costs such as energy, fertiliser and water.
NAB has developed capabilities to improve access, efficiency
and security for carbon markets. • Address key risks from climatic events.
Risk
Carbonplace, a carbon credit settlement platform jointly • Enhance business productivity.
developed by NAB and some of the world's largest financial • Support sustainable farming claims that may strengthen
institutions, completed a successful pilot transfer of Verra- engagement with customers.
certified carbon credits in 2022. The transfer was facilitated
by NAB, on behalf of Visa, and Itaú Unibanco, on behalf of Investing in technological solutions
Sustainable Carbon. One of several pilot trades completed NAB is working with Downforce Technologies to pilot
and targets
in 2022, this trade underscores how the institutions behind remote soil carbon measurement technology with 20 of
Metrics
Carbonplace can collaboratively use infrastructure to develop NAB's customers.
an efficient market for the trading of carbon credits. The partnership aims to test and learn how this type
of technology can be scaled to help customers make
more informed decisions relating to their land management
Sharing insights and opportunities practices, and to provide information on the interventions
NAB hosted its inaugural Transitioning to Net Zero they might apply to improve and retain their soil organic
conference in June 2022. The conference involved carbon profile. This supports enhanced farm resilience,
information
improved productivity and carbon sequestration and provides
Supporting
leaders and decision makers discussing the role of the
financial sector in driving actions to address climate data for customers to be better placed to participate in
change and continue the transition to net zero. carbon offset projects, as well as supporting efforts to
The conference had attendance across a range reduce emissions through their own value chains.
of sectors, with NAB hosting a panel of leading
Partnering for sustainable investment
industry experts from large corporates, not-for-
profit organisations, investment companies and NAB Private Wealth and BlackRock partnered in 2022 to make
public entities. Exchange Traded Funds (ETF) investing more accessible.
Sessions available on demand at: As an extension of NAB Private Wealth's broader relationship
www.business.nab.com.au/transitioning-to-net-zero- with BlackRock, nabtrade and iShares partnered to offer
post-conference-video-on-demand-54247/ a suite of iShares ETFs, including globally diversified and
sustainable multi-asset portfolios. NAB's customer insights
show that investors are increasingly seeking sustainable
investment options and this partnership is combining local
and global expertise to deliver this to customers.
(1) Total value of bonds and loans presented based on principal value. Designation of “green, social, sustainability and sustainability-linked” based on application of
relevant external guidelines and principles (e.g. the ICMA Green/Social/ Sustainability-Linked Bond Principles, ICMA Sustainability Bond Guidelines, LMA/APLMA/LSTA
Green/Social/ Sustainability-Linked Loan Principles). Figures presented represent total bond and total loan size, and do not represent NAB’s notional allocation/
loan commitment.
(2) Rankings based on IJGlobal League Table MLA, Renewables, both cumulative data from 1 January 2010 to 30 September 2022 and for the 12 months ending 30
September 2022.
(3) The Group's target is to provide a cumulative flow of new environmental financing activities of AUD $70 billion over the ten years to 30 September 2025 (off a 2015
baseline) to help address climate change and support the transition to a low-carbon economy. Refer to the 'Environmental financing methodology' section on
page 50 for further information on how this target is calculated.
(4) Available at https://www.climatebonds.net/standard/agriculture

Strategy (cont.)
Personal Bank Bank of New Zealand

Personal Bank is exploring opportunities to embed A key pillar of BNZ’s sustainability strategy is to accelerate
sustainability into home lending products and provide the just transition to a net zero emissions economy that
customers with insights to support their own emissions supports the regeneration of the natural environment and
reductions. It will support its customers to decarbonise and builds resilience. BNZ's climate strategy contains three focus
build resilience by: areas related to supporting customers:
• Providing transaction and property climate-related insights. • Transition its investment and lending portfolios to
• Providing home loans that support climate transition. net zero emissions by 2050, bringing together BNZ's
participation in the NZBA and supporting the requirements
More efficient housing under New Zealand's Climate Change Response (Zero
Personal Bank has been working on solutions that address Carbon) Amendment Act 2019.
cost of living pressures while rewarding customers for • Support customers to transition to low-emissions,
managing their climate impact. Lower variable rates were resilient business models, demonstrating focus on
launched on 17 October 2022 to eligible home loan customers financing the climate transition and recognising that BNZ
on homes that meet energy efficiency criteria. will only meet its net zero goal if customers are taking their
own meaningful climate action.
Under the offer, the property must meet minimum criteria of
at least a NatHERS 7-star rating or a Green Building Council of • Understand climate-related risk and support customers
Australia Green Star rating. With Australian homes contributing to adapt and build resilience, helping better incorporate
more than 15% to Australia's total emissions(1), this new offer climate-related risk into BNZ's strategy, risk management
is an important first step in helping Personal Bank customers approach and financial planning to enable clear public
who are reducing their emissions. disclosure of climate-related risk.
Bushfire Resilience Ratings Retrofit Pilot Transitioning lending and investment portfolios to
In 2021, NAB, along with IAG and BlueScope, supported the net zero by 2050
Resilient Building Council by sponsoring the development of BNZ is a member of the NZBA and aims to transition all
the Bushfire Resilience Rating system, which aims to help operational and attributable GHG emissions from its lending
households adapt their homes to make them more resilient and investment portfolios to align with pathways to net zero
to bushfire. The Resilience Ratings provide a tailored appraisal by 2050 or sooner. BNZ has commenced work to calculate
of a property's vulnerability to bushfire via a self-assessment attributable financed emissions and set emissions reduction
app and a list of evidence-based, practical actions that targets across emissions-intensive sectors: coal mining,
measurably improve the home’s resilience. oil and gas, power generation, agriculture, transport and
commercial real estate. BNZ’s first tranche of 2030 targets will
In 2022, NAB supported the Bushfire Resilience Ratings Retrofit
be launched in 2023.
Pilot in bushfire-impacted areas of New South Wales and
Victoria. NAB is offering discounted lending to participating BNZ has been working to assess transition maturity of its
households who are looking to invest in the resilience of customers, and an update will be provided in its 2022 climate
their property. and sustainability reporting.
Following successful completion of the pilot, the Bushfire Working with Small to Medium Enterprise
Resilience Ratings app, funded by the National Emergency (SME) customers
Management Agency, is intended for a national launch in 2023.
BNZ was a founding partner of the Climate Action Toolbox
in 2020. In 2022, in partnership with the Sustainable Business
Network and other public and private sector partners, BNZ
developed a carbon emissions calculator available to SME
customers through the Climate Action Toolbox.
SMEs can use the calculator to better understand
their emissions impact, enabling them to set goals and
track reductions over time. This tool may support BNZ's
understanding of financed emissions attributable to its
lending to SME customers, supporting product and service
development over time to help SMEs achieve their emissions
reduction goals.
NAB Green Bond issuance

NAB has been an Australian market leader in thematic bond issuance since becoming the first Australian issuer to issue
a climate bond into the domestic market, and the first bank-issuer of a Certified Green Bond under the Climate Bonds
Standard, in 2014. The issuance of these Bonds supports the Group’s climate strategy and its customers in the transition to
a low emissions economy.
In 2022 NAB issued two transactions which were certified by the Climate Bonds Initiative (CBI).
• EUR1bn senior unsecured Green Bond.
• A$500m Green tranche as part of NAB’s Residential Backed Mortgage Security (RMBS) 2022-1.
NAB has now issued five CBI certified Green Bonds and two CBI certified Green RMBS tranches since 2014.
(1) Data sourced from https://www.dcceew.gov.au/climate-change/publications/national-greenhouse-accounts-2020

Strategy (cont.)
Investing in climate capabilities
Our approach to
climate change
The Group is investing in its capabilities to realise Investing in technology and data
its ambition to be a catalyst for climate action To maximise the transition benefits for customers, the
and support efforts to limit global warming to a Group must be able to measure GHG emissions and support
maximum temperature rise of 1.5 degrees Celsius. customers to reduce emissions and adapt. While the Group
has been reporting on operational GHG emissions for almost
two decades, there is a considerable challenge presented
Investing in colleagues in capturing timely and good quality customer GHG emissions
The Group is taking steps to build the capabilities of its data. The Group is at an early stage of maturity in this space
Governance
colleagues to support customers in their transitions. and is seeking to improve the underlying data foundations
required to harness the opportunities the transition to net
FINSIA / Chartered Banking Institute
zero presents.
In Corporate & Institutional Bank, a network of sustainability
NAB's intended investment is looking at solutions to support:
champions of more than 100 colleagues was established
in 2022. • Measuring and reporting climate-related performance.
All champions are enrolled in a program of formal study • Providing insights, tools and products to colleagues
through the Chartered Banker Institute's Certificate in and customers.
Green and Sustainable Finance, which is considered a • Embedding sustainability considerations into key decisions
Strategy
global benchmark qualification for green finance. The and processes.
qualification will help colleagues develop their understanding
and application of green and sustainable finance principles
and practice.
In 2022, sustainability champions also participated in a range
of internal training courses on climate and sustainable
finance topics.
management
Melbourne Business School
Risk
NAB continued its partnership with Melbourne Business School
(MBS) to help develop and deliver targeted climate training
for colleagues supporting customers to decarbonise and build
climate resilience.
Following the initial roll-out of training to 75 C&IB colleagues,
in 2022, 50 Agribusiness leaders and bankers completed the
training in an initial phase. NAB has since tailored this training
and targets
to be delivered at scale across the wider Agribusiness team,
Metrics
with more than 300 bankers and specialists expected to be
trained by the end of December 2022.
Risk Awareness training

The Group’s 2022 annual Risk Awareness training included
a refreshed climate risk module to help all NAB colleagues
understand:
information
Supporting
• Highlights from the latest climate science.
• The goals of the Paris Agreement.
• The key elements of the TCFD’s framework for managing
climate risk.
• Actions being taken by the Group to address climate
change.
The training provided examples of climate-related physical
and transition risks to help colleagues understand the impacts
of climate change on the Group's business, its customers and
the communities in which it operates.
Refer to page 3 in the 'Governance' section for information
on how climate is considered in the Board's development
agenda.
(2) BNZ's reporting will be made available at https://www.bnz.co.nz/about-us/sustainability

Strategy (cont.)
Investing in partnerships, research

and advocacy Supporting a just transition
The role of corporates and financial institutions
Partnering for innovation will be instrumental in planning for and supporting
NAB is working with a range of potential partners, from start- economies' and communities' transitions from high-
ups to corporates, to understand how to best work together emissions electricity generation to a low carbon world.
to support Australia’s climate transition. NAB, through its membership of the United Nations
Global Compact (UNGC), is the only Australian company
Climate change advocacy
participating in the UNGC's Think Lab on Just Transition.
In 2022, NAB engaged closely with industry associations on
The Think Lab on Just Transition was launched by the
issues related to climate change and the transition to net
UNGC with the International Labor Organisation and
zero emissions. This included:
the International Trade Union Confederation (ITUC). It
• Working with the Australian Banking Association (ABA) to aims to:
support a joint submission that collectively represented
• Shape and define business and thought leadership on
the voice of 20 peak professional, industry and
critical areas linked to just transition.
investor bodies on the International Sustainability
Standards Board’s (ISSB) two proposed IFRS Sustainability • Address key business challenges.
Disclosure Standards, covering general and climate-related • Identify policy advocacy opportunities and good
disclosures. NAB also worked with the ABA on its submission business practices.
to the Australian Accounting Standards Board on the • Scale-up lessons learnt through the network of
ISSB’s draft sustainability standards. Both submissions the UNGC.
supported the need for clear, transparent, comprehensive
and comparable disclosure of sustainability-related NAB seeks to learn from its participation and to
information, including action on climate risk. NAB lodged its better integrate relevant social considerations into
own submission to the ISSB, reaffirming its support for a its decision-making as it supports customers to
consistent global baseline. decarbonise and build climate resilience.
• NAB’s work to support the ABA's development of the

Australian banking industry’s climate roadmap, which
details how the banking sector is supporting the Paris
Agreement target of net zero emissions by 2050. The
banking industry roadmap will span four focus areas:
financing tools, risk management, climate disclosure and
operational emissions.
• NAB continues to engage with United Nations Environment
Programme Finance Initiative's (UNEP FI) Principles for
Responsible Banking (PRB) as a Working Group member on
the improvement of the Portfolio Impact Analysis Tool. This
tool is used by financial institutions to analyse their lending
portfolio and understand the areas of most significant
positive and negative impact. NAB's testing of the tool has
confirmed climate as an area of significant impact.
Investing in risk management

The Group is building on its capabilities to manage
sustainability (including climate-related) risk.
Refer to the 'Risk Management' section for further
details on progress in 2022.

Strategy (cont.)
Reducing financed emissions
Our approach to
The Group is setting targets informed by the
climate change
The Group is working to:
best available scientific knowledge to guide
• Improve its understanding of the emissions attributable to
its work to reduce emissions in its financing
its lending and investment activities.
• Set targets to reduce its attributable financed emissions,
and operations.
prioritising emissions-intensive sectors.
• Mobilise investment in colleagues, processes, technology
and partnerships that will support NAB in achieving its
targets.
Governance
Ultimately, the goal is to reduce emissions in the real
economy, aligned with pathways to net zero by 2050.
Refer to the 'Metrics and Targets' section on page 21 for
a detailed update on the Group's interim sector
decarbonisation targets.
Reducing operational emissions
Strategy
The Group is working to:
• Continue to reduce its Scope 1, 2 and 3 operational
emissions.
• Source 100% renewable energy for its electricity
consumption needs.
• Maintain carbon neutrality by purchasing and retiring
carbon offsets for operational emissions it has yet to
management
reduce or avoid.
As the economy's recovery from COVID-19 continues, it is likely
Risk
that activity that generates emissions will also increase.
Refer to the 'Metrics and targets' section on page 35 for a
detailed update on the Group's operational environmental
performance and targets.
and targets
Metrics
information
Supporting

Risk
management Figure 4: The Group's Risk Management Framework
The Group has integrated management of risks

presented by climate change within its Risk
Management Framework processes.
Risk management processes

ESG risks, including climate-related risks, are identified,
measured, monitored, reported and overseen in accordance
with the Group’s Risk Management Framework (as described in
the Group’s Risk Management Strategy).
Risk profiling and assessment processes are key mechanisms
to identify and understand internal and external risks
(including climate change) to operations and strategy
execution. Risk profiling aims to identify and understand
drivers of change, supporting early action, while risk
assessments help to make informed decisions about the risks
the Group is willing to accept, reject or mitigate.
Sustainability Risk, which includes consideration of climate-
related risks, is a material risk category within the Group’s
Risk Management Framework (RMF, see Figure 4). This became
effective on 1 October 2021. Additionally, consideration of
climate-related risk is incorporated within the Group Risk
Appetite Statement (RAS). This was reviewed and updated in
2022 as part of the development of the Group’s 2023 RAS.
ESG risk management oversight

The Group’s Credit and Market Risk Committee is the key risk committee which has oversight of financial risk and ESG risks,
including climate-related risks. This includes ESG-related credit policy and risk settings for emissions-intensive, climate sensitive
and low-emissions sectors. Matters are escalated to the Executive Risk & Compliance Committee, BRCC and the Board
as required.
Figure 5: ESG risk management accountabilities and oversight

Risk management (cont.)
Processes used to determine material the Group's RMF, internal policies and operating procedures
financial impacts if the financial impact was at least $5m or the risk
Our approach to
climate change
NAB uses a mix of qualitative and quantitative (including had non-financial impacts that may include: an extensive
financial) measures to manage risk, including climate risk. injury; an impact to more than 3,000 customers; over 24
These measures consider risk likelihood and consequence. hours interruption to provision of essential banking services/
The Group's Operational Risk Profiling Standard Operating processes; and sanctions including fines, enforceable
Procedures provide this information in the form of likelihood undertakings or mandatory improvements, imposition of
and consequence matrices to enable colleagues to assess capital requirements and regulatory civil proceedings.
significance of financial and strategic impacts on the Group, Reputation risk may also be considered substantive based on
including those arising from climate change. the number and type of stakeholders raising concerns, impact
on reputation benchmarking scores, and direct feedback
Governance
For example, the consequence of a risk or incident may
be defined as substantive/major due to the number of including through NAB's annual ESG materiality process.
customers or proportion of operations impacted, or due to This engagement process is conducted with internal and
the size and length of time that the impact occurs. The Group external stakeholders to seek their views on material issues
considers climate-related risks, impacts and opportunities on facing NAB.
a short, medium, and long-term basis based on environmental Refer to page 23 in NAB's 2022 Annual Report for detail on
scanning and scenario analysis in accordance with the RMF. NAB's ESG materiality assessment.
A financial or strategic impact arising from climate-related
risks would be deemed substantive/major in accordance with
Strategy
Table 1: Types of climate risk considered
Impact to other
Impact
Climate risk type Risk driver Impact Group material
time horizon(1)
risk categories
• Increased reporting obligations and
associated costs.
• Higher operating costs for carbon
management
Current and intensive customers (e.g. carbon tax). • Credit
Short to Medium-
emerging
• Additional potential for non-compliance. term • Compliance
regulation
Risk
• Increased potential capital requirements
for the financing of emissions-
intensive sectors.
• Write-offs and early retirement of existing
assets due to technology changes. Medium to Long-
Technology • Credit
• Cost of/investment in transition to less term
carbon intensive products and services.
and targets
Transition risk • Legal action resulting from the • Credit
Metrics
Short to Medium-
Legal misalignment of public commitments and • Compliance
term
financing decisions. • Conduct
• Re-pricing of assets or increased market

• Credit
volatility during transition.
Market Short to Medium- • Balance sheet
• Reduced demand for products or services
term & liquidity
due to shift in consumer preferences.
• Market
• Increase in operational costs (e.g. energy).
information
Supporting
• Financing decisions for carbon intensive
sectors, or climate policies that reduce Short to Medium-
Reputation • Conduct
emissions do not meet customer and term
investor expectations.
Increased severity and frequency of
extreme weather events could lead to:
• Impacted supply chains or end
customer markets. • Credit
Short, Medium
Acute • Increased insurance and capital costs or • Market
and Long-term
operational outages. • Operational
• Losses due to physical damage and
Physical risk inability to meet customers' demands due
to business interruptions.
Changes in weather patterns (e.g. • Credit
temperature, sea levels) could cause: • Operational
• Impacts to ecosystems, living and • Market
Chronic Long-term
working conditions, agricultural systems • Balance sheet
and infrastructure. & liquidity
• Impacts to existing assets and valuations. • Strategic
(1) The Group defines short-term as 0-3 years (one business planning cycle), medium-term as 3-6 years (two business planning cycles), and long-term as extending past
two business (>6 years) planning cycles. The Group considers a longer-term future outside immediate business planning cycles where a variety of uncertain potential
scenarios are modelled to assess how risks and opportunities could evolve over longer time horizons.

ESG risk and policy settings

The Group regularly reviews its ESG-related credit policy and The settings provide qualitative risk descriptions with
appetite settings, including those related to its exposure respect to what the Group will and will not finance and are
to emissions-intensive, climate sensitive and low-emissions formalised through the Group's Risk Appetite Statement.
sectors. These reviews consider a range of factors including: These settings guide colleagues' decisions on a day-to-day
basis and help ensure that decisions made, suppliers
• Various climate change scenarios for both transition(1) and
engaged and customers supported, are within the Group's
physical risk(2).
risk appetite.
• Customer strategies and plans and their alignment to the
These risk settings are complementary to the Group's interim
Paris Agreement temperature goals.
sector decarbonisation targets, which have been set to
• Industry trends. guide the Group's lending across key sectors in its portfolio
• Trends in Group exposures to these sectors. to align to net zero emissions by 2050.
To date, this review process has led to implementation Further detail about NAB’s first tranche of interim sector
of ESG-related credit policy and risk settings as outlined decarbonisation targets is provided in the 'Metrics and
in the highlight box below. targets' section (refer to pages 23 to 33).
ESG-related credit policy and risk settings for coal, oil and gas
NAB has clear credit policy and risk settings for coal, oil and gas sectors. These are set out below. They operate
alongside NAB’s interim sector decarbonisation targets, set out in the 'Metrics and targets' section (from page 21).
Coal
• NAB has capped thermal coal mining(3) EAD at 2019 levels.
• NAB will not finance new thermal coal mining projects or take on new-to-bank thermal coal mining customers.
• NAB separately reports its thermal coal-related rehabilitation performance guarantees as part of reporting its
resources exposures (see page 19).
• NAB will not finance new or material expansions of coal-fired power generation facilities.
• NAB recognises that currently there are no readily available substitutes for the use of metallurgical coal in steel
production. NAB will continue providing finance to its customers in this segment, subject to enhanced due
diligence which further considers underlying environmental, social and governance risks.
Refer to pages 28-29 for information on NAB's thermal coal sector decarbonisation target.
Oil and gas

• NAB has capped oil and gas(4) EAD at USD2.4 billion.
• NAB will continue to support integrated liquified natural gas (LNG) in Australia, New Zealand, and Papua New Guinea
and selected LNG infrastructure in other regions.
• NAB will not directly finance greenfield oil extraction projects or onboard new customers with a predominant focus
on oil extraction.
• NAB will only consider directly financing greenfield gas extraction in Australia where it plays a role in underpinning
national energy security.
• NAB will not directly finance greenfield gas extraction projects outside Australia.
• NAB will not finance oil and gas extraction, production or pipeline projects within, or impacting, the Arctic National
Wildlife Refuge area or any similar Antarctic Refuge.
• NAB will not directly finance oil/tar sands or ultra-deep-water oil and gas extraction projects.
Refer to pages 30-31 for information on NAB's oil and gas sector decarbonisation target.
(1) For the purpose of this work, transition risk was defined as the impact of low-carbon policy and transition to low-carbon technology on markets and industries.
(2) For the purpose of this work, physical risk was defined as the risk resulting from climate variability, extreme weather events and longer-term changes in climate
patterns.
(3) Thermal coal EAD includes direct exposure to customers whose primary activity is thermal coal mining. EAD for these caps includes lending, derivatives and
performance guarantees for the rehabilitation of existing assets. Excludes metallurgical coal mining and diversified mining customers. NAB’s NZBA-aligned
sector decarbonisation target includes diversified mining customers with revenue >5% from direct sale of thermal coal and excludes metallurgical coal mining
customers.
(4) Oil and gas EAD includes oil and gas extraction (upstream); liquefied natural gas (LNG) production (not at refineries – downstream LNG); and LNG production at
wellhead (integrated LNG). EAD for these caps includes lending, derivatives and performance guarantees for the rehabilitation of existing assets.

Assessing potential climate risk 1. Understand the vulnerability of the Group's lending portfolio
using scenarios
Our approach to
and its customers in key high emitting segments to
climate change
transition and physical risk; and
The Group uses climate-related scenario analysis to help
inform its strategy, risk appetite and risk management. 2. Understand the sectoral decarbonisation pathways to
transition to a net zero lending portfolio by 2050 and set
The Group’s use of scenarios has been two-fold, to:
sectoral decarbonisation targets to achieve this goal.
Table 2: Summary of climate scenario models used by NAB in 2022(1)

Scenario Net Zero by 2050(2) Delayed Transition(3) Current Policies(3)
The Delayed Transition scenario
Governance
assumes global annual emissions
do not decrease until 2030.
Strong policies are then needed
Provides a technology pathway to limit warming to below 2 °C.
resulting in a clean, dynamic Negative emissions are limited. The Current Policies scenario
and resilient energy economy This scenario assumes new assumes that only currently
dominated by renewables like solar climate policies are not introduced implemented policies are
and wind instead of fossil fuels. until 2030 and the level of preserved, leading to high physical
This scenario requires massive action differs across countries risks. Emissions grow until 2080
deployment of all available clean and regions based on currently leading to about 3°C of warming
energy technologies – such as implemented policies. Australia and severe physical risks. This
Strategy
renewables, electric vehicles and continues on its current policy includes irreversible changes like
Description energy efficient building retrofits – direction to 2030, likely achieving higher sea level rise. Australia
between now and 2030. its Paris agreement target has no linkage to wider emissions
Most reductions in CO2 emissions principally through economic trading schemes, and no national
through to 2030 come from decarbonisation of the electricity emissions target beyond 2030. The
technologies available today. But system rather than new emissions electricity sector continues to
in 2050, almost half the reductions policies. From 2030, Australian evolve based on market outcomes.
will come from technologies that emissions follow a global This scenario tests sensitivity and
are currently at the demonstration emissions trajectory towards net resilience to high physical risk.
zero emissions by 2050, with a
management
or prototype phase.
single global price for emissions
and offsets.
Risk
This scenario tests sensitivity and
resilience to high transition risk.
Network for Greening the Financial
Scenario used IEA NZE 2050 NGFS - Current policies
System (NGFS) – Delayed Transition
Scenario Used for sectoral decarbonisation Used for portfolio stress testing Used for portfolio stress testing
application target setting and customer-level analysis and customer-level analysis
Policy ambition/
and targets
global warming 0.3-1.7oC 1.6oC 3oC+
Metrics
by 2100
Policy reaction High – significant cooperation Delayed None - current policies
Technology
Fast Slow/Fast Slow
change
Use of carbon
Medium use Low-medium use Low use
dioxide removal
Regional
Low variation High variation Low variation
policy variation
information
Supporting
Physical impacts Low Low High
Carbon price Portfolio modelling USD37-USD144 (5)
Portfolio modelling USD16-USD62(5)
range per tonne
USD130-USD250(4) Customer-level analysis USD0.63- Customer-level analysis USD0.63-
CO2-e from 2030
to 2050 USD497(6) USD2.70(6)
Associated
Representative
N/A RCP 2.6 RCP 8.5
Concentration
Pathway (RCP)
(1) Details of BNZ's climate risk scenario modelling can be found in their climate reporting, which will be made available at: https://www.bnz.co.nz/about-us/sustainability
(2) Description adapted from IEA’s NZE 2050 summary available at: Net Zero by 2050 – Analysis - IEA
(3) NGFS scenario descriptions are adapted from the NGFS Scenarios Portal: NGFS Scenarios Portal.
(4) These numbers are based on USD 2019 dollars and relate to advanced economies only. Refer to Table 2.2 in the IEA Net Zero by 2050: A Roadmap for the Global
Energy Sector.
(5) The forecasted carbon price from a private consultant has been used for portfolio modelling.
(6) The forecasted carbon price from the NGFS REMIND-MAgPIE 2.1-4.2 model has been used for customer-level analysis.

Portfolio and customer-level climate-related Figure 6: Summary of NGFS Scenarios

scenario analysis
During 2022, NAB used two key climate scenarios from the
Network for Greening the Financial System (NGFS) scenario
set to assess the climate vulnerability of its lending portfolio
through climate-related scenario analysis. See Figure 6 which
highlights the two NGFS scenarios used by NAB.
NAB’s climate risk-related scenario analysis examined climate
impacts on: (i) home lending, agri and non-retail portfolios;
and (ii) a subset of individual high emitting customers in
climate vulnerable sectors.
The two climate scenarios used for NAB’s climate risk-related
scenario analysis were:
1. Current Policies (climate inaction) – a scenario that leads
to higher temperature increases and increased physical
risk; and
2. Delayed Transition – a scenario where policy changes
and a global carbon price are suddenly introduced in
2030. NAB considered climate risks through both bottom-up
detailed customer-level modelling and top-down portfolio
stress testing.
Portfolio level climate stress testing was informed by physical
and transition scenario data, internal experts, insurance and Source: NGFS Scenarios Portal, available at
non-insurance data and stress testing models to segment the www.ngfs.net/ngfs-scenarios-portal/
portfolio by relative risk levels and estimate financial impacts
in terms of future losses. Physical risk modelling covered a climatic impacts and changes in NAB’s portfolio composition. It
range of perils (flood, cyclone, drought, heat, fire, rainfall) and is important to note that the scenarios used for NAB's climate
used postcode level projections of the potential change in risk-related scenario analysis represent two possible futures
climate risks, which were translated into estimated financial and that there is a high degree of uncertainty related to
impacts. Portfolio level analysis was applied to both mortgage the quantitative loss outcomes, which means impacts could
and business lending. be significantly larger or smaller, depending on actual future
For customer-level analysis, the focus was on analysing events which may occur.
climate-related risk for a sample of customers in a range
of high emitting sectors including: coal mining, oil & gas
Key insights from NAB's climate risk-related portfolio
extraction, electricity supply, manufacturing, construction
and customer-level analysis:
and transport. Portfolio-level analysis:
In order to support modelling assumptions at a customer • Home lending – The climate risk-related modelling showed
level, NAB engaged with the majority of customers in the that less populated regional and remote postcodes
sample to: (i) validate key variables and assumptions used in are more subject to extreme physical climate stress.
transition risk-related financial analysis; and (ii) understand Other recent public analysis by the Reserve Bank of
their exposure to physical risks and the management actions Australia and commercial providers suggests there may
(mitigation and adaptation) they are taking or planning to take. also be heightened risk in more populated coastal
A quantitative analysis of transition risk was conducted for areas, particularly in southern Queensland. The role of
all customers in the sample. For most customers in the adequate insurance coverage is important in building an
sample the data to support quantitative analysis of physical understanding of climate risk exposure of banks, given in
risk was not readily available. For some customers, NAB’s the absence of insurance, the risk of collateral damage
modelling was able to incorporate a quantitative assessment is essentially transferred to a bank. For home lending,
of both physical and transition risk impacts into credit risk transition risk is fundamentally a second-order risk, driven
analysis. As physical risk is location specific, it required use of by loss of employment in impacted industries and regions.
geographical information and translation of the climate data The impact may also be higher in regions where there
into some form of financial loss or damage that reflected, for is a larger proportion of Fly-in Fly-out workers. Overall,
example, a decrease in production or repairs to a physical transition risk appears to be lower risk than physical risk
asset. In these cases, NAB was able to translate: for the home lending portfolio.
1. Physical climate impacts into productivity impact • Business lending – High emitting non-agricultural sectors
(via revenue). with elevated risk levels (e.g. coal, oil and gas) make
2. Transition impacts (via a carbon price impacting up a relatively small part of the Group’s direct lending
operational costs) into changes in financial performance exposures. Most industry sectors are expected to have
and subsequent credit ratings. only minor or short-term impacts from the sudden
introduction of a carbon price in 2030 under the
Under the climate scenarios used for NAB's climate-risk delayed transition scenario modelled by NAB. However,
related analysis, only a small proportion (approximately 2%) understanding the links between industries is important.
of NAB exposures face a high level of climate risk exposure, For example, rail and water transport are generally less
which moderates the overall impact. The overall portfolio emission intensive than road and air, but this advantage
impact was rated as moderate. However, this could change may be neutralised if operators are transporting carbon
and become material depending on the range and speed of intensive products, and demand for their customers’

products decreases materially. For agricultural lending This climate risk-related scenario analysis (portfolio and
Our approach to
analysed, regions with the greatest projected physical risk customer level) is complementary to that required for
climate change
impacts aligned to 2017-2019 drought experience. NAB did assessing customer’s transition plans and determining NAB’s
not see material credit losses through this drought, but the sectoral decarbonisation pathways.
compounding impacts of more frequent and severe and Moving forward NAB will consider key learnings from its climate
multi-hazard events is highly likely to increase this risk level risk-related scenario analysis in:
in the future.
• Future assessment of the impacts of compound climate
Customer-level analysis: events(1) and/or physical risk tipping points.
• Agribusiness – Under the Current Policies scenario, • Building future climate-related data requirements into
there was only minor deterioration in credit risk ratings NAB’s climate risk capability.
Governance
across the sampled customers due to chronic physical • Future changes to risk appetite and policy settings, where
risk (shifts in climate). However, this modelling did not appropriate, to manage climate-related risks.
consider acute physical impacts (extreme weather events) • Future planning for climate risk measurement and
and compound events. Industry sectors, particularly in monitoring, including building internal capability in geo-
agriculture, may have tipping points where businesses spatial mapping.
are severely impacted (e.g. animal mortality resulting
from extreme temperature stress). Tipping points need • Future financing provided to support customers to
to be better understood and integrated into analysis to decarbonise and build climate resilience.
inform risk management and appetite decisions. Although
Strategy
agribusiness can be particularly vulnerable to physical risk,
particularly acute physical risk, NAB could see that some
of NAB’s agribusiness customers are already adapting.
For example, some customers in the sample had already
installed cooling for cows (to maintain milk production
during heat waves), others were using genetics to select
for greater ability of animals to cope with heat stress,
with others improving water efficiency to manage drought-
management
related risks. Under the Delayed Transition scenario,
agribusiness customers can experience deterioration
Risk
in credit rating, as a result of the introduction of a
carbon price. NAB noted positive signs that agribusiness
customers were implementing a range of carbon mitigation
actions including installing renewable energy, planting
legumes for pasture, installing biogas production to
manage effluent/animal waste, using feed supplements to
reduce methane emissions and using nitrogen inhibitors to
and targets
reduce fertiliser emissions.
Metrics
• Non-agri customers – Under a Delayed Transition scenario,
without mitigation, some customers experience significant
credit rating deterioration in 2030 and beyond. For
customers that have transition plans to reduce emissions,
the potential ability to pass through, or absorb, cost
increases reduces potential credit rating deterioration.
After accounting for customer mitigation plans, a number
information
Supporting
of customers still experience significant credit impacts
under a Delayed Transition scenario due to their early
stage of transition plan adoption, low levels of investment
in decarbonisation activities, and reliance on future
technology development. Customers in similar industry
sectors can experience quite differing transition risk
impacts reflective of business models with varying reliance
upon carbon-intensive assets or differences in the degree
to which customers have committed to transition and
adaptation plans.
(1) These are cumulative climate events with no time for full or partial recovery between events. Measuring the impact of these events can be complex, but it reflects
observed circumstances in a number of locations in Australia.

Participation in industry climate

risk initiatives
Recognising that climate change as an issue cannot be
addressed by the Group alone, in 2022, the Group continued
to collaborate and participate in climate risk-related industry
activities and projects. These aimed to better understand, and
implement, methodologies to assess and manage climate risk.
This included the following:
• Completed the Australian Prudential Regulation Authority
(APRA)-led Climate Vulnerability Assessment (CVA).
The key objectives of the CVA were to:
– Measure the potential financial exposure of
participating banks to both physical and transition
climate risks.
– Understand how participating banks would adjust their
business models and implement management actions in
response to the different scenarios.
– Improve banks’ climate risk management capabilities.
The CVA was a collaborative pilot exercise involving APRA
and a number of major Australian banks including NAB.
• UNEP FI Task Force on Climate Related Financial
Disclosures (TCFD) programme - NAB has continued its
participation in this program in 2022. This included updates
from regulators on climate stress testing activities from
NGFS members, review of a range of tools being developed
for climate-related risk analysis, and updates on climate-
related litigation.
• ABA Climate Risk Working Group – This included NAB's
participation in the development of an Australian banking
industry climate roadmap, which details how the banking
sector is supporting the Paris Agreement target of net
zero emissions by 2050. The banking industry roadmap will
span across four focus areas: financing tools, risk
management, climate disclosure, and operational
emissions.
• Climate Measurement Standards Initiative (CMSI) – In
2022, the CMSI commenced work on its Phase 2 work
program. The Group has supported this cross-sector
industry initiative since it formed in 2020. The CMSI includes
representatives from across the banking, insurance and
investment sectors alongside pre-eminent Australian
climate scientists working together under the auspices of
the National Environmental Science Program, professional
services firms and finance sector industry bodies. The
objective of the CMSI is to provide open source voluntary
guidance on climate risk.
• The Australian Industry Energy Transitions Initiative
(Australian Industry ETI) – The Australian Industry ETI aims
to accelerate action towards achieving net zero
emissions in hard-to-abate supply chains by 2050 while
managing the transition to thrive in a decarbonised global
economy. The Group continued to support this
collaborative industry initiative led by ClimateWorks
Australia and Climate-KIC Australia. In FY2022, the
Australian Industry ETI released analysis into regional net
zero opportunities across five targeted sectors.

Metrics and targets
This section outlines the metrics and targets the Group uses to assess and manage relevant
Our approach to
climate-related risks and opportunities.
climate change
Climate-related targets
Portfolio Environmental Operational emissions Sourcing renewable
Governance
alignment target financing target reduction target energy target
Net $70bn 51% 100%

zero by Target of new flow
environmental financing
Target to reduce Scope
1 and Scope 2 tCO2-e
Target to source 100% of
electricity consumption
2050
to be provided by 2025 against a 2015 from renewables by 2025
2016-2025 (Page 34). baseline (Page 35). (Page 35).
Strategy
First tranche of interim
sector decarbonisation
targets now published
(Page 23).
management
The Group has developed metrics and targets to track movements in foreign exchange positions across the
progress against its climate strategy, measure and manage existing portfolio and is not due to an increase in
Risk
its climate-related risks and opportunities. This includes underlying lending.
disclosing the Group's exposure to high-emitting sectors, – Oil and gas exposure (lending only) decreased to
environmental financing provided to help address climate USD0.99 billion (30 September 2022) from USD1.53 billion
change, and measures to support the reduction of financed (30 September 2021). NAB discloses its oil and gas
and operational emissions. lending exposures in USD as the majority of its lending
In developing these metrics and targets, the Group continues is denominated in that currency.
to work on and improve methodologies, including adding
Supporting the transition to net zero
and targets
granularity and updating external client and industry data as it
Metrics
becomes available over time. Changes to previously disclosed The Group’s assessment of climate-related risks and
data or methodologies are stated where relevant. opportunities has led to targets associated with: (i)
decarbonisation of the Group's operations; and (ii) supporting
Exposure to high-emitting sectors customers through the low-carbon transition. The Group’s
The Group's exposure to high-emitting sectors, with high progress on these targets includes:
levels of transition risk, are outlined below. The below figures • Decarbonising operations
are all based on the Group's exposure at default as at – Progressing towards the Group's RE100(3) target to
information
Supporting
30 September 2022. source 100% of its electricity consumption from
• Power generation exposure increased slightly to $7.36bn, renewable sources by 30 June 2025. The proportion
from $7.18bn in 2021. of electricity sourced which was renewable electricity
– Renewable energy represents 72.8% ($5.36 billion) of the increased from 31% in the 2021 environmental reporting
power generation portfolio, up from 71.4% ($5.12 billion) in year to 72% in the 2022 environmental reporting year.
2021.(1) Further information is available on page 35.
– Coal-fired power generation has reduced to zero within • Supporting customers

the power generation portfolio, from 1.2% in 2021. The – Interim sectoral decarbonisation targets set for four
Group still has indirect exposure to coal-fired power sectors, detailed from page 23.
through its corporate level exposure to gentailers, – Environmental financing target: $70.8bn provided(4),
which have a mix of generation assets (including coal, detailed on page 34.
gas and renewables) within their generation portfolio.
• Thermal coal mining exposure decreased to $0.42 billion
(2022) from $0.52 billion (2021).(2)
• Oil and gas exposure increased from $2.90 billion at
30 September 2021 to $3.60 billion at 30 September
2022. This increase was significantly driven by passive
(1) NAB methodology (based upon the 1993 ANZSIC codes) at net EAD basis. Excludes exposure to counterparties predominantly involved in transmission and distribution.
Vertically integrated retailers included and categorised as renewable where majority of their generation activities sourced from renewable energy.
(2) ~23% of thermal coal exposures is exposure to rehabilitation guarantees.
(3) RE100 is a global corporate leadership initiative bringing together businesses committed to 100% renewable electricity.
(4) Represented as cumulative flow of new environmental finance since 1 October 2015. Refer to the 'Environmental financing target methodology' on page 50 for a
further breakdown of how this number is calculated.

Metrics and targets (cont.)
Understanding financed emissions

The Group is connected to all parts of the economy through
its lending and other banking activities and has an important
role to play in financing the low-carbon transition.
2022 is the third year that the Group has completed an

estimation of attributable financed emissions for its
lending portfolio. The Group has made several
improvements to its methodology, outlined below. Due to
these changes, prior period financed emissions are not
comparable.
• Aligning the financed emissions baselines with the 10

clearly defined emissions-intensive sectors outlined in
the UNEP FI Guidelines for members of the NZBA.
Specifically, agriculture; aluminium; cement; coal;
commercial real estate; residential real estate; iron and
steel; oil and gas; power generation; and transport sectors.
As a result of this alignment, the only potential reduction in
coverage in lending is a small loss in SMEs where individual
firms were unable to be allocated to the emissions-
intensive UNEP FI sectors. The Group is working to improve
data quality and insights to help reduce emissions across
all of its lending portfolio.
• Aligning emissions reporting and EAD reporting dates. For
the purposes of reporting financed emissions in 2022, NAB
has aligned the reporting periods for emissions and EAD to
30 June 2021. Note, the delay between emissions reporting
and NAB's reporting date is due to the lag between when
customers report their emissions (e.g. to the Clean Energy
Regulator through obligations under the National
Greenhouse and Energy Reporting Act) and the availability
of this data for NAB's reporting.(1) In NAB's previous reporting,
financed emissions were calculated based on EAD during
NAB's reporting year, with emissions from the prior year.
• Expanding coverage of financed emissions baseline.
In 2022, the Group expanded coverage to international
exposures (excluding Bank of New Zealand exposures) for
relevant sectors. Additionally, NAB supplemented the
baseline dataset with production-based, revenue-based
and other financial based estimates, to calculate
emissions for customers where reported emissions data
was not available.
Refer to the 'Financed emissions methodology' section

in 'Supporting information' for details on how the Group
measures its attributable financed emissions.
(1) The Clean Energy Regulator publishes emissions data for companies reporting under NGER Act reporting period of July-June in February of the following calendar year.
The Group's reliance on this information results in a lag between when companies report their data, and when NAB publishes its financed emissions.

Reducing financed emissions
Our approach to
The Group is taking action to support
climate change
The Group recognises its ability to help the economy
transition through the financing it provides. In the Group's 2021 customers as they reduce their emissions
Annual Review, the Group outlined its intention to set and
publish emissions reduction targets for a substantial majority and has set targets to guide emissions
of its Australian lending portfolio. The Group has since joined reduction across its lending.
the NZBA, furthering this ambition to align its operational and
financed emissions with pathways to net zero by 2050,
consistent with a maximum temperature rise of 1.5°C above reference scenarios, assumptions and methodologies that
pre-industrial levels by 2100. are different to those used by NAB in setting its targets. NAB
Governance
Working towards this ambition, NAB has set interim 2030 may continue lending to such customers if doing so is
sectoral decarbonisation targets ('sector targets') for its consistent with NAB’s targets at a portfolio level.
lending portfolio in four of its most emissions-intensive Emissions reduction across the lending portfolio is unlikely
sectors: power generation, oil and gas, thermal coal mining to be linear. New lending will occur, including to enable and
and cement production. accelerate customer transition plans to achieve net zero.
In setting these targets, NAB has been informed by the UNEP FI This may lead to a temporary increase in absolute financed
Guidelines for Climate Target Setting for Banks ('UNEP FI emissions and emissions intensity in some reporting years
Guidelines'). between now and 2030, however these are intended to
NAB has prioritised target-setting for its lending portfolio, decline over time towards NAB's sector targets.
Strategy
recognising the most significant impact NAB has on emissions The Group will consider national energy security requirements
is through the finance it provides. The Group's baselines and in relation to the power generation and oil and gas sectors. It
targets currently exclude NAB's New Zealand banking is expected that decisions based on national energy security
subsidiary BNZ, which has separately signed up to the NZBA. would be by rare exception. Such decisions may impact on the
Over time, it is intended that BNZ's financed emissions will be Group's ability to achieve financed emission reduction targets.
brought into the Group's baselines, targets and reporting.
The Group views climate transition as both a risk and
Learn more about BNZ's progress in its forthcoming climate
an opportunity. NAB's sector targets and associated
management
and sustainability reporting(1).
methodologies are aligned to the Group's ambition to be a
catalyst for climate action, as detailed on page 5.
The Group's role in sector transition
Risk
Across its lending portfolio, the Group will support the The Group's existing ESG-related credit policy and risk settings
transition to net-zero by 2050 by: relevant to carbon-intensive sectors (page 14) complement
its sector targets.
• Supporting customers to accelerate their
decarbonisation plans. For example, providing financing NAB's sector targets complement the Group's targets to
for decarbonisation activities, innovation and the near- reduce emissions associated with its own operations (page
term deployment of existing viable technologies. 35) and the Group's target to provide $70bn in financing
and targets
activities planned to help address climate change and support
Metrics
• Working to re-balance its portfolio exposure to
the transition to a low carbon economy (page 34).
customers with lower emissions intensities. For example,
increasing funding to customers advanced in their Challenges associated with financed emissions and
transition plans. This approach will only apply to sectors target setting
where an intensity target has been selected in order to
Measuring financed emissions and setting emissions
facilitate growth in lending that will support transition (e.g.
reduction targets involves considerable complexity and
in power generation where energy demand is forecast to
uncertainty, particularly given that financial institutions are
increase, see page 26.)
predicting movements over almost 30 years. Despite the
information
Supporting
• Advocating for change that supports the transition with challenges and issues associated with setting targets for
policymakers, regulators, industry associations, customers financed emissions reduction, the Group considers that there
and investors, as well as the broader community. is still considerable value in doing so as the targets help to
• Considering selectively reducing exposure to high guide organisational decisions over time.
emitting clients that have been unable to demonstrate how Data availability, quality and timeliness vary considerably
they are aligned with the Group's sector targets. within and across businesses, industries and geographies.
Refer to the 'Strategy' section on pages 5-11 for further Consistency in reporting guidance and frameworks is
information on the actions the Group is taking to achieve improving, though reporting is often completed on a voluntary
its strategic ambition to support customers to basis and requirements vary across jurisdictions.
decarbonise and build climate resilience. Climate science is continuously evolving: methodologies and
A sector-specific approach to attributable financed emissions assumptions underpinning scenarios the Group relies on for
enables the Group to consider varying factors such as setting targets are subject to change and may require targets
technological advancement or supply and demand, that will to be revised. Scenarios may also rely on the development
likely impact absolute emissions reduction across the of potentially impactful but largely unproven technologies,
economy. with risk that investment in these areas fails to achieve
Customers within sectors will have varied emissions reduction intended outcomes.
trajectories. NAB's targets should be viewed at a sector Targets have been set with reference to the best science
portfolio level, rather than at an individual customer level. currently available, as detailed in the 'Reference scenario
Customers may have emissions profiles that differ from NAB’s selection' section on page 23. At a minimum, the Group will
sectoral targets or transition plans that are based on data,
(1) BNZ's reporting will be made available at https://www.bnz.co.nz/about-us/sustainability

review its sector targets on a five-yearly basis in alignment

with NZBA requirements.
These challenges impact the ability to accurately and
consistently measure attributable financed emissions and to
set and achieve appropriate targets to reduce attributable
financed emissions.
Further information on challenges associated with
attributable financed emissions data and target setting can
be found on page 44 of the ‘Supporting information’ section of
this Climate Report.
Further information on important factors that could impact
NAB achieving its climate-related ambitions, including its
sector targets, is contained in the 'Disclosure on Risk Factors'
section discussing Sustainability Risk on pages 91-92 of the
Group's 2022 Annual Report. This includes information on how
physical, transitional and nature-related risks may impact
the Group, including the relationship between more frequent
and acute physical climate events on the value of the
Group’s collateral assets.

Table 3: Summary of NAB's 2030 sector targets
Our approach to
climate change
NAB's Exposure at 2021 Absolute Emissions
Default (EAD) Performance Targets
(MtC02-e)
Sector
Sector Sector Target
Scope 1 2021(4) 2030
EAD Proportion Scope 3 Total Metric(3) Reduction
and 2 Target
$bn(1) of EAD(2) (%)
Sectors with targets set(5)
Power tCO2-
generation 5.8 0.67% 3.0 e/MWh 0.2 0.14 32%
Governance
Thermal coal 0.7 0.09% 0.5 4.6 5.1 MtCO2-e 5.1 0.0 100%
Oil and gas 1.9 0.22% 0.4 3.7 4.1 MtCO2-e 4.1 3.2 21%
Cement(6) 0.8 0.09% 0.7 tCO2-e/t 0.6 0.46 24%
Sectors with target work ongoing
Commercial tCO2-e/
real estate(7) 6.0 0.70% 0.03 $mEAD 5.0
Residential tCO2-e/
real estate 365 42.33% 1.8 $mEAD 4.8
tCO2-e/
Strategy
Iron and steel(8) 0.2 0.02% 0.08 $mEAD 524.0
tCO2-e/
Aluminium(9) 0.05 0.01% 0.07 $mEAD 1,514.9
tCO2-e/
Agriculture 30.6 3.55% 3.3 $mEAD 108.2
tCO2-e/
Transport 9.6 1.11% 3.4 $mEAD 357.7
(1) EAD for the purposes of target setting is as at 30 June 2021, excludes BNZ, and off-balance sheet financing activities. See Scope of financing activities on the following
management
page (page 24) for details.
(2) Sectoral EAD presented as a percentage of Group EAD, excluding BNZ, as at 30 June 2021.
Risk
(3) Where targets have been set, the metric has been selected as either absolute emissions or physical intensity. Where targets are yet to be set, financed emissions
have been presented on an intensity basis for estimated tCO2-e per $m of EAD.
(4) 2021 performance represents the baseline year for the first tranche of sector targets.
(5) Refer to pages 26-33 for detail on the four sector targets that have been set in 2022.
(6) Due to data availability, the Cement baseline estimate may include a small amount of rehabilitation bonding, but quantity is not considered significant compared to
overall baseline for the sector.
(7) Commercial Real Estate Attributable Financed Emissions represent only 9% coverage of the EAD of this sector. Unlike other sectors, NAB has not extrapolated the
remainder to estimate our attributable financed emissions to avoid sampling bias in this sector.
(8) Does not currently include Metallurgical Coal mining, however sector coverage is intended for expansion in 2023.
and targets
(9) Does not include Bauxite mining.
Metrics
Approach to sector target setting
The Group has considered the following in its approach and Key principles for target-setting
decision-making on target-setting. NAB has adopted the following principles in its design
and setting of targets.
Sector prioritisation
• Alignment with UNEP FI Guidance and
This year, NAB updated its reporting of financed emissions decarbonisation objectives.
information
Supporting
attributable to its lending portfolio to align to the ten 'carbon-
• Scientifically credible pathway to achievement, in
intensive' sectors defined by the UNEP FI Guidelines(1). Power
line with Australian market conditions.
generation, thermal coal, oil and gas and cement sectors have
been prioritised as they represent the majority of financed • Consistency in decision-making across the portfolio.
emissions attributable to NAB's lending portfolio and are • Consideration of market practice and alignment to
among the most emissions-intensive sectors in NAB's lending emerging disclosure regimes.
portfolio (based on Australian emissions: Scope 1 and 2 tCO2-
• Simplicity in reporting and operationalising the
e / $m EAD).
targets that have been set.
The Group will set sector-level targets for the remaining
carbon-intensive sectors by May 2024, consistent with
requirements of the NZBA.
• Widely accepted, science-based from credible and well
Reference scenario selection recognised sources and consistent with a maximum
The Group assessed a range of net-zero scenarios aligned to temperature rise of 1.5°C above pre-industrial levels by 2100.
its ambition to inform target-setting. • Reasonable in assumptions on negative emissions
The International Energy Agency’s Net Zero Emissions 2050 technologies and carbon sequestration achieved through
scenario (IEA NZE 2050 scenario) was selected as the nature-based solutions and land use change, and aligned
reference scenario for all four first tranche sector targets, on to “no overshoot” or “low-overshoot” scenarios.
the basis it is consistent with the scenario selection • Designed to maximise alignment with other Sustainable
requirements of the UNEP FI Guidelines, which are: Development Goals, where possible.
(1) The UNEP FI Guidelines require that, "where data and methodologies allow, targets shall be set for all, or a substantial majority of agriculture; aluminium; cement; coal;
commercial and residential real estate; iron and steel; oil and gas; power generation; and transport sectors". Note that the Group has separated commercial and
residential real estate into individual sectors in its reporting.

A summary of the IEA NZE 2050 scenario is available in the customer emissions data is not available, third-party data
'Target Setting Baseline Methodology' section on page 49. sources are relied upon.
Sector specific scenario assumptions are outlined in the The Group has followed the Partnership for Carbon Accounting
following pages for each sector target. NAB's sector target for Financials (PCAF) recommendation to publish scores to
power generation includes additional assumptions relevant to illustrate the Group's assessment of the quality of data relied
the achievability of this sector target. upon and methodology for target setting. These are provided
Note, the Group also draws on scenario analysis in its alongside each sector target in pages 26-33.
risk management and strategic processes, outlined on
pages 15-17. Scope of financing activities
Relevant exposures are identified primarily through ANZSIC
Absolute or intensity metric selection codes. Financed emissions baselines and targets have been
(1)
The Group has considered whether physical intensity or set using 'Exposure at Default' (EAD) . For the purposes of
absolute emissions reduction metrics are appropriate for setting sector targets, this measure covers all types of NAB’s
each sector. lending to relevant customers, including:
The Group has set absolute emissions targets for the thermal • Any on-balance sheet loans and lines of credit with
coal and oil and gas sectors, consistent with achieving an unknown use of proceeds to businesses, non-profits and
absolute reduction in lending over time to these sectors (see any other structure of organisation.
page 14). • Revolving credit and overdraft facilities and business loans
It is appropriate to adopt absolute targets for fossil fuel secured by real estate, such as commercial real estate-
industries, as decline in the use of fossil fuels is a key driver of secured lines of credit.
emissions reductions in the IEA NZE 2050 scenario. • Business loans, short-term debt and lines of credit.
Physical intensity targets require emissions reductions to This excludes off-balance sheet and markets related
outweigh growth in output. Physical intensity metrics are EAD, covering derivatives and performance guarantees to
appropriate for power generation and cement, as each of rehabilitate existing thermal coal mining and oil and gas
these sectors will require growth to support living standards assets. Targets do not include debt capital markets activity
and expected population increases. (i.e. facilitated emissions) recognising there are no currently
By contrast, an absolute target for these sectors would agreed methodologies for measuring emissions associated
incentivise a reduction in production to meet the target. with these activities or approaches for net-zero-aligned
Setting a physical intensity target for these sectors will enable target setting. The Group will review this as guidance and
the Group to identify and allocate capital towards investments methodologies evolve. Australian Energy Market Operator
and businesses that are focused on lowering their emissions, (AEMO) bonds have been excluded as they are a requirement
for example renewable energy and sustainable alternatives to to participate in domestic electricity and gas markets
traditional emissions intensive products. for any entity not regulated by the Australian Prudential
Regulation Authority.
Scope of emissions
Significant manual processing and analysis is required to
The Group's approach to emissions scope inclusion is identify diversified companies with greater than 5% of revenue
described below and has been informed by the UNEP from thermal coal mining and thermal coal-fired power
FI Guidelines. generation within NAB’s financed emissions reporting. Further,
The first tranche of sector targets includes Scopes 1, 2 and it is often the case that small, diversified companies do not
3 emissions for fossil fuels (thermal coal and oil and gas), disclose breakdowns of their revenue or production, making
recognising the significant materiality of Scope 3 emissions it extremely difficult to identify them for the purposes of
within these sectors. NAB has obtained, or where unavailable the 5% revenue threshold. NAB applied a series of materiality
estimated, production data and applied emission coefficients thresholds in performing this analysis, including a $1 million
to calculate Scope 3 emissions for lending to these sectors. EAD floor. This has the potential to result in some customers
with relatively low absolute EAD, but who derive greater than
Scope 3 emissions have not been included in the targets
5% of their revenues from thermal coal mining or coal-fired
for cement and power generation due to a combination of
power generation, not being identified within NAB’s thermal
lower data quality and availability, and because the majority
coal target.
of emissions in each of the sector value chains are Scope 1
and Scope 2. Data quality, particularly for Scope 3 emissions EAD figures are as at 30 June 2021, to align with regulatory
is expected to improve as current and proposed reporting reporting dates for Scope 1 and 2 emissions in Australia.
frameworks are implemented in Australia and globally. In line Current UNEP FI Guidelines state that banks should include
with UNEP FI Guidelines, and as part of its periodic target on-balance sheet investments held for the purposes of
review processes, the Group will look to expand its emissions investment. For the Group, this would include investments
scope inclusions where methodologies and data allow. made by NAB Ventures, however there are currently no
Scope 1 emissions for the power generation sector are investments held in the sectors covered by the first tranche
included in the total Scope 2 emissions for all other sectors. of sector targets.
NAB has included this ‘double-count’ within its attributable
emissions estimate, to account for all emissions each sector
is responsible for.
The Group prioritises use of emissions data from customer-
reported sources, such as compliance reporting required
under the National Greenhouse and Energy Reporting Act
2007 (NGER Act) and assured company reports. Where verified
(1) Exposure at Default represents the expected lending exposure at default, taking into account the repayment of principal and interest from the balance sheet date to
the default event together with any expected drawdown of a facility.

Operationalising the targets The financed emissions reduction targets are intended to
Our approach to
help guide the Group’s decision-making over time at a sector
climate change
Governance, approval and oversight portfolio level, rather than being a commitment to specific
NAB's sector targets have been reviewed and approved by the outcomes at an individual customer level.
Executive Leadership Team and the Board. The Group will provide an update on implementation, and
While the first tranche predominantly impacts customers intends to publish its high-level transition plan, in its
in the Corporate and Institutional Banking division, 2023 reporting.
decarbonisation is relevant to all the Group's divisions. Refer to pages 39-48 for detail on the Group's financed
The Group's governance of climate-related risks and emissions and target setting methodology. Note that the
opportunities, including sector targets, is discussed further following sector targets cannot be read or understood
Governance
in the 'Governance' section of this Report. without this information.
The Group's climate-related obligations, including those
related to the NZBA, are recorded and managed in its
enterprise risk management tool. Clear accountabilities are
assigned to relevant executives, with associated controls
reviewed on an annual basis.
Integrating sector targets within NAB's processes

Having set initial sector targets, NAB is working towards
Strategy
their implementation and integration across its business
and supporting functions over time. Initial implementation
and integration steps have prioritised core requirements
to support operationalising sector targets, in the form of
process changes to assist colleagues in reviewing potential
transactions against the sector targets.
This includes:
management
• A tool to calculate the expected impact of a new or
refinancing transaction on NAB's attributable financed
Risk
emissions and ability to meet its targets.
• Integrated with the tool, guidance to record the existence,
details and maturity of customers' transition plans and
to inform decision-making and provide clear approval
escalation pathways where required.
• Additional, tailored policy guidance on NAB’s status as a
and targets
signatory to NZBA, NAB’s sector targets, and the obligations
Metrics
that flow from them, to support colleagues.
• Completing a review of NAB's lending policies and guidance
notes to ensure simplicity and consistency with NAB’s
sector targets.
• Training for colleagues with responsibility for lending
decisions within sectors included in the first tranche of
sector targets.
information
Supporting
The Group is at an early stage of maturity in meeting
requirements of its participation in the NZBA and first tranche
of sector targets. The Group will develop a transition plan
to set out greater detail on how it will work with customers
between now and 2030 to reduce their emissions in line with
the Group's targets.
This will consider enablers, such as data systems, policy and
risk setting alignment, training and partnerships, required to
achieve its strategic ambition.
Priority next steps include:
• Investing in development of a climate data ecosystem
to provide meaningful insights to customers to support
their own carbon footprint estimation and identify targeted
opportunities to reduce emissions. It will also support
the Group in improving the quality of its transaction
assessments and reporting, including the required
improvements in data quality to support target setting for
the remaining emissions-intensive sectors.
• Building on the steps taken to date to better assess the
maturity of customers' transition plans, including continuing
to work with the NZBA and industry bodies on development
and trialling of relevant guidance.

Power generation Table 4: Power generation target overview

Key target elements Approach selected for
Figure 7: Power generation sector target and IEA NZE 2050 Power generation
2021 baseline 0.20 tCO2-e/MWh
2030 target 0.14 tCO2-e/MWh

(32% reduction against baseline)
Sector inclusion Electricity generation from fossil fuels
and renewable sources. Excludes
transmission and distribution due
to their immateriality to value
chain emissions.
Reference scenario IEA NZE 2050
Emissions scope Scope 1 and 2
Metric Emissions intensity (tCO2-e /MWh)
Financing scope EAD excluding derivatives and AEMO

performance guarantees (see page for
24 for scope of financing)
Data quality score Average PCAF score: 1.7 (Scope 1 and 2)
Sector overview
As the primary contributor to global emissions, decarbonising the global electricity supply will be critical to reducing emissions
and achieving a net zero world by 2050. At the same time, demand for electricity will continue to grow globally.
In Australia increased demand is expected through the electrification of industry and transport. Decarbonisation of
commercial real estate and residential housing in particular is heavily reliant on the electricity system, further highlighting the
critical role this sector will play in the global transition.
Given the Group's ambition to be a catalyst in Australia's climate transition, a critical challenge and opportunity lies in this
sector.
NAB’s sector target for power generation is a 32% decrease in emissions intensity (tC02-e / MWh) by 2030, against a 2021
baseline.
NAB's lending (EAD) to the power generation sector totals $5.8bn, 0.67% of total EAD(1).
Key scenario assumptions
IEA NZE 2050 assumptions

To achieve net zero emissions by 2050, the IEA NZE 2050 scenario requires the emissions intensity of the power generation
sector to decrease to 0.14 tCO2-e/MWh in 2030. Key assumptions(2) which underpin this reduction include:
• Emissions fall by 57% between 2020 – 2030 and carbon intensity decreases by 68% in the same period.
• Renewables growth is initially driven by additional solar photovoltaic (PV) capacity, followed closely by wind before 2030
• Generation from coal drops to 9% in 2030, with 9% of coal-fired generation coming from plants fitted with carbon capture
utilisation and storage (CCUS) technology.
• Unabated natural gas-fired generation peaks by 2030.
• Unabated coal-fired generation is phased out in advanced economies by 2030.
• Coal-fired plants are retrofitted to co-fire with ammonia and gas turbines with hydrogen by 2025.
Additional NAB assumptions

NAB’s modelling of the achievability of meeting its interim sector target for power generation also depends on the following
additional assumptions:
• NAB's forecast for its financed emissions in power generation assumes that customers’ existing asset retirement plans
remain the same (or are accelerated).
• NAB assumes that when non-renewable generation capacity is retired, it is replaced with renewable generation (i.e. no
new non-renewable power generation assets).
• NAB has assumed that government policies and incentives, along with market economics, support an orderly transition to
renewable forms of power generation at the levels and within the timeframes anticipated by those plans.
If the above assumptions do not occur as anticipated, NAB’s sector target for power generation is a stretch target that will
be difficult to achieve without some other government action and/or technological improvements in the sector.
(1) Note, EAD for the purposes of setting targets is as at 30 June 2021, to align with the regulatory reporting period for the National Greenhouse and Energy Reporting
Act and currently excludes BNZ.
(2) NAB's consideration of key assumptions from the IEA NZE 2050 relevant to power generation. This list is not exhaustive.

Power generation (cont.)
Our approach to
climate change
NAB's approach
The Group has identified three broad avenues of action to achieve the targeted reduction:
• Supporting customers to accelerate the decommissioning of coal and gas-powered assets.
• Increasing financing to renewable power generation.
• Considering selective reduction in the Group's exposure to customers that do not have a transition plan.
The Group's thermal coal sector risk policy settings (set out on page 14) are also expected to help NAB meet this target. These
settings include not financing new, or material expansions of, coal-fired power generation facilities.
Governance
While the Group has selected a global reference scenario to inform its power generation target, NAB has given specific
(1)
consideration to the Australian energy market dynamic, including government and market operator plans .
The need to manage the phase-out of high-emitting power generation assets over time will require continued investment. As
the Group provides lending to support this transition, including to support investment in emissions reduction activities, financed
emissions to power generation will likely increase in the short-term. The Group does not anticipate a linear pathway between
now and achieving its 2030 target. The Group selected an emissions intensity measure (tCO2-e / MWh) recognising the underlying
scenario anticipates increase in energy demand.
Reporting on this sector target in future periods may consider the application of specific managed phase-out frameworks
currently being developed by the Global Financial Alliance for Net Zero (GFANZ).
Strategy
NAB will consider national energy security requirements in relation to the power generation sector. It is expected that
decisions based on national energy security would be by rare exception. Such decisions may impact on NAB’s ability to
achieve financed emission reduction targets.
Refer to pages 5-11 for further information on NAB's climate strategy to support customers to decarbonise and build
climate resilience.
Sourcing sector data
management
NAB has assessed its lending portfolio to identify customers outside of the power generation sector that generate more than
Risk
5% of their revenue directly from sale of thermal coal-fired electricity. NAB has not identified any such customers in its 2021
baseline. Note this information has been sourced from public sources of coal assets, alongside company production
information and revenue data where available. Particular challenges associated with identifying diversified companies for this
purpose and potential gaps in emissions capture resulting from those challenges are described on pages 21 and 44.
NAB has a relatively high level of confidence in the data, with 96% of emissions production data sourced from national
government inventories across Australia (NGERS) and the United States of America (EPA), and direct company disclosures
(United Kingdom). The remaining 4% is sourced from third-party sources (United States of America - EIA). See the 'Data Quality
and targets
Scores' in the 'Financed Emissions Methodology' section for detail on data quality scores and limitations.
Metrics
Other sections of this Climate Report include important information that is relevant to NAB’s sector targets and which
will assist readers in assessing and understanding the targets NAB has set. Please also refer to the following sections of
this report for information relevant to NAB’s sector targets:
• ‘Complexities and limitations in measuring financed emissions and setting targets’ on page 44.
• Information relating to financed emissions methodology, target setting methodology and other measures, metrics
and methodologies relevant to sector targets in ‘Supporting information’ from page 38.
information
Supporting
• ‘Notes on forward looking statements’ on page 54.
(1) Australian Energy Market Operator, 2022 Integrated System Plan For the National Electricity Market, June 2022.

Thermal coal Table 5: Thermal coal target overview

Key Approach selected for Thermal coal
Figure 8: Thermal coal sector target and IEA NZE 2050
target elements
2021 baseline 5.1 MtCO2-e
2030 target 0.0 MtCO2-e

Sector inclusion Mining of black coal, brown coal and
lignite. Including diversified companies
where these activities make up greater
than 5% of their revenues. Excludes
emissions associated with metallurgical
coal mining customers, including those
with more than 5% revenue from thermal
coal sales, as these are captured within
the 'Iron and Steel' sector emissions per
UNEP FI Guidelines.
Reference IEA NZE 2050
scenario
Emissions scope Scope 1, 2 and 3
Metric Absolute emissions (MtCO2-e)
Financing scope EAD, excluding markets products,

derivatives and rehabilitation performance
guarantees (see page 24 for scope
of financing)
Data Average PCAF score: 1.4 (Scope 1 and 2), 2.7
quality score (Scope 3)
Sector overview
Reducing reliance on thermal coal will be critical in Australia's transition to a net zero economy. Thermal coal mining
currently contributes over 7% of Australia's total Scope 1 emissions , and is a significant source of emissions for power
(1)
generation domestically and internationally. Emissions reduction will be achieved through substituting coal-fired power
with renewable energy and curbing exports of thermal coal.
NAB’s sector target for thermal coal is a 100% decrease in absolute emissions by 2030, against a 2021 baseline.
NAB's lending (EAD) to the thermal coal sector(2) totals $0.7bn, 0.09% of total EAD(3).
IEA NZE 2050 scenario assumptions

To achieve net zero emissions by 2050, the IEA NZE 2050 scenario requires absolute emissions in the coal sector to reduce
(4)
to zero unabated emissions within advanced economies. Key assumptions which underpin the reduction include:
(5)
• Coal emissions decline by 55% by 2030 from 2021.

• No new coal mines or extensions are required beyond those already committed.
NAB's approach
NAB’s thermal coal sector target has been prepared in line with UNEP FI Guidelines(6) as follows:
• Includes customers with thermal coal mining as their primary activity and diversified miners which generate more than 5% of
revenue from thermal coal mining.
• Excludes metallurgical coal mining customers, including where some secondary customer revenues come from the sale of
thermal coal. Emissions related to metallurgical coal mining are intended to be reported in the 'Iron and Steel' sector and will
be included in a separate target.
Achieving this target will require a combination of existing thermal coal sector customers diversifying their operations, and
reducing exposure to customers that are not transitioning their operations in line with NAB’s sector target. The Group's thermal
coal sector policy settings (set out on page 14) are also expected to help NAB meet this target. These settings include not
financing new thermal coal mining projects, or taking on new to bank thermal coal mining customers.
(1) National Inventory by Economic Sector 2020, Department of Climate Change, Energy, the Environment and Water
https://www.greenhouseaccounts.climatechange.gov.au/
(2) As defined in the 'Financing scope' in 'Thermal coal target overview' table above.
(4) In IEA NZE 2050, coal includes both primary coal (including lignite, coking and steam coal) and derived fuels (including patent fuel, brown-coal briquettes, coke-
oven coke, gas coke, gas-works gas, coke-oven gas, blast furnace gas and oxygen steel furnace gas). Peat is also included.
(5) NAB's consideration of key assumptions from the IEA NZE 2050 relevant to thermal coal. This list is not exhaustive.
(6) UNEP FI Guidelines for Climate Target Setting for Banks allow for metallurgical coal to be considered within the value chain of the iron and steel sector (refer page
7 of the UNEP Guidelines).

Thermal coal (cont.)
Our approach to
climate change
NAB has capped thermal coal mining(1) exposures at 2019 levels and intends to reduce these exposures by 50% by 2026,
to be effectively zero(2) by 2030, apart from residual performance guarantees to rehabilitate existing thermal coal mining
assets.
climate resilience.

To identify and include emissions from companies with greater than 5% of revenue generated directly from thermal coal
mining, NAB has matched a global database of coal mines to its customer list to identify customers with associated coal-
Governance
based assets and revenues.
There are particular challenges associated with identifying diversified companies for this purpose, involving significant
manual processing and analysis. It is often the case that small, diversified mining companies do not disclose breakdowns of
their revenue or production, making it extremely difficult to identify them for the purposes of the 5% revenue threshold. NAB
applied a series of materiality thresholds in performing this analysis, including a $1 million EAD floor. This has the potential to
result in some customers with relatively low absolute EAD, but who derive greater than 5% of their revenues from thermal coal
mining, not being identified within NAB’s thermal coal target.
Please refer to page 44 for further details of this selection methodology.
Strategy
100% of company Scope 1 and 2 emissions have been sourced from customer-reported sources (e.g. Company reporting, NGER
reporting). 50% of Scope 3 emissions have been sourced from customer-reported sources, with 50% from production
estimates completed by NAB.
management
Risk
and targets
Metrics
information
Supporting
(1) Thermal coal exposures covered by this include direct exposure (including lending and guarantees) to customers whose primary activity is thermal coal mining.
Includes performance guarantees for the rehabilitation of existing coal mining assets. Excludes metallurgical coal mining and diversified mining customers.
(2) 'Effectively zero' refers to the fact that the Group may still hold some exposures to thermal coal in 2030, only through residual performance guarantees to rehabilitate
existing coal mining assets. These guarantees are excluded from the financed emissions coverage of NAB's thermal coal sector target.

Oil and gas Table 6: Oil and gas target overview

Key Approach selected for Oil and gas
Figure 9: Oil and gas sector target and IEA NZE 2050
target elements
2021 baseline 4.1 MtCO2-e
2030 target 3.2 MtCO2-e

Sector inclusion Extraction and production of natural
gas, liquefied natural gas (LNG), liquefied
petroleum gas (LPG) and oil shale
(i.e. upstream oil and gas activities).
Excludes exploration activities due to
immateriality of emissions associated
with exploration.
Reference IEA NZE 2050
scenario
Emissions scope Scope 1, 2 and 3
Metric Absolute emissions (tCO2-e)
Financing scope EAD excluding derivatives and

rehabilitation performance guarantees
(see page 24 for scope of financing)
Data quality score Average PCAF score: 2. 1 (Scope 1 and 2),
2.5 (Scope 3)
Sector overview
Reducing emissions across oil and gas extraction and production will require significant industry change in Australia,
accounting for almost 10% of domestic Scope 1 emissions.(1) Reducing demand for oil and gas is linked to the transition of other
key sectors, such as power generation, where gas currently accounts for about 19% of the Australian electricity generation
(1)
fuel mix, and transport, where petrol and diesel cars represent the significant majority of vehicles.
NAB’s sector target for oil and gas is a 21% decrease in absolute emissions to 3.2 MtCO2-e by 2030, against a 2021 baseline.
(2)
NAB's lending (EAD) to oil and gas sector totals $1.9bn, 0.22% of total EAD(3).
IEA NZE 2050 assumptions(4)

To achieve net zero emissions by 2050, the IEA NZE 2050 scenario requires NAB to reduce its absolute emissions attributable to
lending to the oil and gas sector to 3.2 MtCO2-e in 2030. Key assumptions which underpin that scenario pathway include:
• No exploration is required and no new oil or gas fields are needed beyond those that have already been approved for
development from 2021.
• Demand for oil and gas declines by 14% from 2020 to 2030, with an anticipated price of $US130 per tCO2-e in 2030 in
advanced economies making a large portion of production not economically viable, therefore putting downward
pressure on production.
• Reductions in operational emissions via:
– Ending flaring and methane leaks from oil and gas supply chains.
– Using carbon capture utilisation and storage (CCUS) with centralised sources of emissions.
– Electrification of upstream operations.
• 75% decrease from 2020-2030 in methane emissions using emissions reduction measures and technologies.
NAB also notes the IEA NZE 2050 scenario assumes adoption of CCUS technologies to capture Scope 3 emissions. NAB will support
action in this space by financing end-users such as gas-fired power stations and heavy industries to adopt CCUS where credible
and appropriate. NAB does not currently consider CCUS to be an effective lever in its own right for the oil and gas sector, and
notes that replacing fossil fuels with renewable energy is a primary requirement of the IEA NZE 2050.
NAB's approach
NAB has identified a number of core strategies to assist it to meet its target, and that it will seek to deploy in combination,
depending on the progressive rate of decarbonisation within its oil and gas lending portfolio. This includes supporting
customers with financing to reduce their Scope 1 and 2 emissions by decarbonising their extraction operations, such as
through the reduction of methane leaks and flaring, and diversifying their businesses.
NAB’s oil and gas sector risk policy settings (set out on page 14) are also expected to assist NAB to meet this target.
NAB will continue to provide corporate lending to existing oil and gas customers. From 1 October 2025, new lending and
renewals will require oil and gas customers to have a transition plan in place.
(1) Australian Energy Statistics, Table O, Department of Climate Change, Energy, the Environment and Water 2022.
(2) As defined in the 'Financing scope' in the 'Oil and gas target overview' table.
(3) Note, EAD for the purposes of setting targets is as at 30 June 2021, to align with the regulatory reporting period for the National Greenhouse and Energy Reporting Act
and currently excludes BNZ.
(4) NAB's consideration of key assumptions from the IEA NZE 2050 relevant to oil and gas. This list is not exhaustive.

Oil and gas (cont.)
Our approach to
climate change
NAB’s oil and gas sectoral target relates to NAB’s financed emissions, set at a portfolio level, and does not assume that all
customers within that sector will adopt transition plans or business activities based on the same data, reference scenarios,
assumptions and methodologies used by NAB for this purpose.
NAB will consider national energy security requirements in relation to the oil and gas sector. It is expected that decisions
based on national energy security would be by rare exception. Such decisions may impact on NAB’s ability to achieve financed
emission reduction targets.
climate resilience.
Governance
The Group has calculated its attributable financed emissions from oil and gas extraction and production based on Scope 1, 2
and 3 emissions relative to its customers EAD.
89% of customer Scope 1 and 2 emissions have been sourced from company reports, with the remaining sourced from third-
party reports, or calculated using equity-based estimates. 78% of Scope 3 emissions are derived from production-based
estimates, with the remainder sourced from company reports.
Each of NAB’s four interim sector decarbonisation targets should be read in the context of this Climate Report as a whole.
Strategy
management
Risk
and targets
Metrics
information
Supporting

Cement Table 7: Cement target overview

Key target elements Approach selected for Cement
Figure 10: Cement sector target and IEA NZE 2050
2021 baseline 0.60 tCO2-e / t
2030 target 0.46 tCO2-e / t
Sector inclusion Portland and hydraulic cement
manufacturing. Excludes concrete and
lime manufacturing.
Reference scenario IEA NZE 2050
Emissions scope Scope 1 and 2
Metric Emissions intensity (tCO2-e / tonne
cement produced)
Financing scope EAD excluding derivatives (see page 24
for scope of financing)
Data quality score Average PCAF score: 2.3
Sector overview
As a key component of concrete, cement is one of the most used materials in the world. It is expected to play an important
role in the global transition to net zero through its use in important infrastructure such as wind farms, climate-resilient
housing and low-carbon transport. However, the cement sector is also a large source of global GHG emissions, contributing
to around 1% of Australia's Scope 1 emissions,(1) and about 7% of global emissions.(2)
NAB’s sector target for cement is a 24% decrease in emissions intensity (tCO2-e / tonne cement produced) by 2030,
against a 2021 baseline.
NAB's lending (EAD) to the cement sector totals $0.8bn, 0.09% of total EAD(3).
IEA NZE 2050 assumptions

To achieve net zero emissions by 2050, the IEA NZE 2050 scenario requires the emissions intensity of the cement sector to
decrease to 0.46 tCO2-e /t in 2030. Key assumptions(4) which underpin that scenario pathway include:
• Cement production increases by 5% from 2020 to 2030, while emissions decline by about 19%.
• Increased blending of alternative materials into cement to replace a portion of clinker, reduced growth in demand for
cement and energy efficiency measures deliver around 40% of emissions reductions by 2030.
• The clinker-to-cement ratio declines from 2020 by about 0.8% per year, leading to a global average ratio of 0.65 by 2030.
• CCUS technologies in cement production are commercialised by 2030.
NAB's approach
The Group considers that actively supporting customers with finance to decarbonise their operations is a credible action to
achieve emissions reduction and its cement sector target.
The Group may consider selectively reducing its exposure to customers that do not have a transition plan in place.
NAB's lending exposure to the cement industry is concentrated across a small number of customers. Any change in the
composition of NAB’s lending exposure to the cement industry could significantly impact the Group’s progress toward achieving
its target for the cement sector.
climate resilience.

NAB has calculated its attributable financed emissions from cement manufacturing based on Scope 1 and 2 emissions relative to
its customers' EAD. Scope 3 emissions have been excluded from this stage of target-setting due to data availability issues, as the
Group has found Scope 3 emissions are currently rarely reported by customers in the cement sector.
38% of company emissions data was sourced directly from customer-reported sources, with the remainder estimated using
sector wide emissions intensity ratio, as production data is not readily accessible for cement companies.(5)
(1) National Inventory by Economic Sector 2020, Department of Climate Change, Energy, the Environment and Water
https://www.greenhouseaccounts.climatechange.gov.au/
(2) Global Cement and Concrete Association 2021 https://gccassociation.org/news/global-cement-and-concrete-industry-announces-roadmap-to-achieve-
groundbreaking-net-zero-co2-emissions-by-2050/
(4) NAB's consideration of key assumptions from the IEA NZE 2050 relevant to cement. This list is not exhaustive.
(5) Estimated through calculation from revenue and average cement price data and supplemented with PACTA data.

Cement (cont.)
Our approach to
climate change
Other sections of this Climate Report include important information that is relevant to NAB’s sector targets and which will
assist readers in assessing and understanding the targets NAB has set. Please also refer to the following sections of this
report for information relevant to NAB’s sector targets:
Governance
Strategy
management
Risk
and targets
Metrics
information
Supporting

Environmental financing target

The Group's ambition is to grow by supporting customers to As outlined in the table below, this included:
decarbonise and build climate resilience. • $40.7bn to support green infrastructure, capital markets
One of the ways the Group measures its progress is its and asset finance.
environmental financing target to provide $70bn in financing • $30.1bn in new mortgage lending flow for new dwellings
activities planned to help address climate change and and significant renovations for 6-Star residential housing
support the transition to a low carbon economy from in Australia.
2016-2025. First set in 2015, the target was designed to
The Group's approach to climate action has developed
drive and align activities to support environmental outcomes.
considerably since 2015, though its focus continues to be on
This included development of associated methodologies,
how it can help its customers take climate action. The
reporting processes and innovation in product offering.
Group will consider future opportunity-oriented targets to
This year, the Group has met and exceeded its 2025 target, support the achievement of its climate strategy.
having provided a total of $70.8bn in environmental financing
since 1 October 2015.
Table 8: Environmental financing by lending category ($bn)(1)

Cumulative
Financing category 2016 2017 2018 2019 2020 2021 2022
total
Lending activity
Lending for green commercial buildings 0.2 0.0 0.0 0.5 0.5 1.3 0.7 3.2
Specialised lending, corporate and securitisation
0.7 1.6 2.3 2.6 3.1 3.6 5.0 18.9
finance for applicable projects
Asset finance 0.1 0.0 0.2 0.0 0.0 0.03 0.0 0.3
Green term deposits 0.0 0.0 0.0 0.4 0.0 0.1 0.1 0.6
Debt market activity
Green bonds 0.4 1.7 2.7 0.0 0.0 0.0 1.5 6.3
Advisory, underwriting and arranging activities
Advisory, underwriting and arranging activities 0.0 0.2 0.3 3.6 2.0 3.6 1.7 11.4
Progress towards 2025 target of $35 billion 1.4 3.5 5.5 7.1 5.6 8.6 9.0 40.7
Lending to support development of 6-star
5.7 2.8 4.0 3.6 3.3 5.2 5.5 30.1
Residential properties(2)
Progress towards 2025 target of $35 billion 5.7 2.8 4.0 3.6 3.3 5.2 5.5 30.1
Progress towards aggregated 2025 target of
7.1 6.3 9.5 10.7 8.9 13.8 14.5 70.8
$70 billion
(1) Represents total cumulative flow of new environmental financing from 1 October 2015. Totals may not appear to sum due to rounding. Further details on how the
Group calculates its environmental financing is available in the 'Environmental financing target methodology' section on page 50.
(2) Along with new home construction, this amount includes residential financing provided for activities where the identified loan purpose is ‘Construction'. This
typically includes major renovation activity in which the borrower undertakes a progressive drawdown of the loan amount. For major renovations, State building
requirements for such construction activity generally require the overall home to meet a 6-star natHERS rating (or equivalent).
For further information how the Group calculates progress towards its $70 billion environmental financing target, refer
to pages 49-50 'Environmental Financing Methodology'.

Reducing operational emissions Figure 11: Group electricity consumption (MWh) by fuel
Our approach to
source type
climate change
It’s everyone’s job to reduce greenhouse gas emissions. The
Group is playing its part by reducing its own emissions
136,447
footprint while helping customers to reduce theirs. As the first 128883
128,883
Australian bank certified carbon neutral in 2010(1), NAB has
118233
118,233
maintained a long-standing focus on avoiding and reducing
GHG emissions, and offsetting those that remain. 103879
103,879
91155
91,155
Purchasing renewable energy
Delivering on the Group’s RE100(2) target to source 100% of its 28%
Governance
electricity consumption from renewable sources by 30 June 99% 69%
97%
2025, includes using on-site solar generation at the Group’s 93%
main data centre, power purchase agreements and
contracts for renewable energy certificates. The proportion
of the Group's electricity consumption that was sourced 72%
from renewable electricity increased from 31.4% in the 2021
31%
environmental reporting year to 72.4% in the 2022
1% 3% 7%
environmental reporting year.
2018 2019 2020 2021 2022
Reducing operational emissions and environmental
Strategy
impact Non-renewable electricity (MWh)
In the 2022 environmental reporting year, the Group’s Renewable electricity (MWh)
performance against its energy and science-based
emissions reduction targets were as follows:
• 47% reduction in energy use against a 30 June 2019 baseline Figure 12: NAB's market-based operational emissions
(against a target of a 30% reduction in energy use by by scope
30 June 2025).
management
6,619
• 74% reduction in the Scope 1 and 2 GHG emissions as at 30
June 2022 against a 30 June 2015 baseline (towards the
Risk
Group's science-based target of a 51% reduction by 30 June
2025).
The GHG emissions reductions in environmental reporting year 38,552
2022 have been greater than expected partly due to the 32,066
ongoing impacts of COVID-19, including reduced building
occupancy and restricted travel. This was despite the Group
and targets
taking into account the emissions generated by employees
Metrics
working from home. It is expected that some of these
emission reductions will not be permanent as the Group
continues to adjust to a hybrid way of working and business- Scope 1 Scope 2 Scope 3¹
related travel resumes. (1) Scope 3 emissions for NAB's operational footprint excludes financed
The Group’s energy efficiency initiatives, including the move emissions. For detail on how NAB is assessing Scope 3 emissions attributable
to its financing, refer to pages 39-48.
into new more energy efficient buildings and the inclusion of
lower emissions vehicles in its car fleets, are expected to
The role of offsets
information
Supporting
result in permanent GHG emissions reductions. The Group is
starting to see the reductions resulting from these initiatives While NAB’s approach to carbon neutrality is focused on
realised in its GHG emission data. reducing operational emissions, the Group uses quality
accredited carbon offsets to neutralise remaining emissions.
Detailed GHG and environmental performance data is available
in the Group's 2022 Sustainability Data Pack. Additionally, the NAB’s purchasing and retirement of offsets is guided by the
Group has a number of other targets which contribute to Group Environmental Reporting and Offset Management
operational efficiency and reduction in the Group’s Scope 3 Policy, and is disclosed annually in NAB’s Climate Active Public
operational emissions. Performance against these targets is Disclosure Statement, as part of its carbon neutral
shown in Table 9 on the following page. certification. NAB has purchased offsets only from Australian
sources since 2020, with a focus on savannah burning
projects which utilise traditional Indigenous land-practices.
(1) Certified carbon neutral since 1 July 2010. NAB has a forward purchasing approach and forward purchased and retired offsets for the environmental reporting
year (1 July 2010 to 30 June 2011) to be carbon neutral for 2011 and meet certification obligations, under the Australian Government's Carbon Neutral Program, now
administered by Climate Active.
(2) RE100 is a global corporate leadership initiative bringing together businesses committed to 100% renewable electricity.

Table 9: Performance against environmental operational targets

Indicator 2019 Target 2022 2022
Target
baseline(1) date actual reduction
Science-based GHG emissions (tCO2-e)(2) 150,893 ▼51% 2025 38,685 74%
Gross Energy use (GJ) 759,096 ▼30% 2025 405,542 47%
Office paper (A3, A4 and A5) (tonnes) 514 ▼20% 2025 168 67%
Customer eStatements (proportion online only - Aus and 64% ▲to 80% 2025 70% N/A
BNZ only)
Water use (potable water withdrawal) (kL) 385,005 ▼5% 2025 163,659 57%
Waste to landfill (tonnes) 1,871 ▼10% 2025 626 67%
Vehicle fuels (GJ) (Aus and BNZ only) 120,686 ▼50% 2025 49,265 59%
Colleague air travel (tCO2-e) (BNZ only) 4,679 ▼70% 2025 607 87%
(1) Baseline figures include data from MLC Wealth operations as NAB had operational control at the time of calculation. As the divestment from MLC Wealth did not have a
material impact on the baseline figures (<5%), these have not been re-stated.
(2) This target has a baseline of 2015 and covers all direct GHG emissions (Scope 1) and indirect GHG emissions from consumption of purchased electricity (Scope 2) across
all GHGs required in the GHG Protocol Corporate Standard. The target has been prepared in accordance with the Sectoral Decarbonisation Approach 'Services Buildings’
methodology published by the Science Based Target initiative and uses the Science-Based Target Setting Tool, v1.1. In 2023, the baseline will be restated to reflect
organisational changes (including emissions following the acquisition of Citigroup’s Australian consumer business, and expansion of operations in Europe, Vietnam
and India, and excluding emissions from MLC Wealth operations). It will also align with a 1.5°C scenario and implement the latest version of the Science-Based Target
Setting Tool.
Regulatory and voluntary operational

environmental reporting
The Group’s operations are subject to the National
Greenhouse and Energy Reporting Act 2007 (Cth) (NGER Act).
This is part of Australia’s legislative response to climate
change. The NGER Act requires the Group to report on the
period from 1 July to 30 June (the environmental reporting
year), therefore, all of the Group's energy and greenhouse gas
(GHG) emissions reporting is aligned to this reporting period.
For further detail on this, see the 2022 Annual Report.
The Group is voluntarily reporting data required for the
Streamlined Energy & Carbon Reporting (SECR) requirements
which are implemented through the Companies (Directors’
Report) and Limited Liability Partnerships (Energy and Carbon
Report) Regulations 2018 (United Kingdom) in this 2022 Climate
Report. The Group's United Kingdom-based (London Branch)
energy use reported, and aligned to the SECR for the
2022 environmental reporting year was 506,076 KWh (2021:
419,667KWh). The associated total gross GHG emissions from
fuel combustion (Scope 1) and from electricity use (Scope 2)
were 97 tCO2-e (2021: 87 tCO2-e). This equates to 198 KWh and
0.04 tCO2-e per metre squared of property space occupied by
the Group's London Branch. Further London Branch and Group
energy and GHG emissions data is provided in Table 10 to
satisfy SECR requirements. See Table 10 for more detail.
In 2014, the Group’s United Kingdom-based operations became
subject to the Energy Savings Opportunities Scheme (ESOS),
introduced by the United Kingdom ESOS Regulations 2014.
The ESOS requires mandatory energy assessments (audits)
of organisations' buildings and transport to be conducted
every four years. The Group fulfilled its most recent ESOS
obligation in December 2019 and will resubmit as required in
December 2023, if it continues to meet the ESOS qualification
requirements at 31 December 2022.
Additional detail on the Group’s environmental and climate-
related performance is provided in the 2022 Sustainability Data
Pack available at nab.com.au/annualreports.

Streamlined Energy and Carbon Reporting (SECR)
Our approach to
climate change
Table 10: Key GHG emissions and energy use (1 July - 30 June)
London Branch NAB Group (excluding NAB Group Total(1)
London Branch)
2021 2022 2021(2) 2022 2021(2) 2022
Energy from gas consumption (KWh) 64,131 45,312 16,773,264 2,764,836 16,837,395 2,810,148
Energy from vehicle fleet fuel use (KWh) 0 0 23,261,807 18,347,741 23,261,807 18,347,741
Energy from electricity consumption (KWh) 355,536 460,764 96,216,129 88,344,922 96,571,665 88,805,756
Governance
(3)
Total energy for SECR reporting (KWh) 419,667 506,076 136,251,200 109,457,570 136,670,866 109,963,646
GHG emissions from energy use (Scope 1 – 12 8 3,118 532 3,130 541
Gas) (tCO2-e)
GHG emissions from vehicle fleet (Scope 1) 0 0 5,818 4,582 5,818 4,582
(tCO2-e)
GHG emissions from energy use (Scope 2, 75 89 74,774 68,779 74,850 68,868
location-based – electricity) (tCO2-e)
Total gross Scope 1 & 2 GHG emissions for 87 97 83,710 73,893 83,797 73,990
SECR reporting (tCO2-e)(3)
Total gross Scope 3 emissions (tCO2-e) 477 587 46,482 42,392 46,960 42,979
Strategy
Intensity ratio: Energy (KWh)/$ 0.00138 0.003 0.016 0.01113 0.01708 0.013789
(4)
Financial metric
Intensity ratio: Gross Scope 1 & 2 GHG (tCO2 0.0000003 0.000001 0.000010 0.0000075 0.000010 0.000008
(4)
-e)/ $ Financial Metric
Intensity ratio: Energy (KWh)/ m2 144 198 195 181 339 378
Intensity ratio: GHG (tCO2-e)/ m2 0.03 0.04 0.12 0.12 0.15 0.16
Intensity ratio: Energy (KWh)/ FTE 1,506 1,718 3,906 3,338 5,413 5,057
management
Intensity ratio: GHG (tCO2-e)/ FTE 0.31 0.33 2.40 2.25 2.71 2.58
Risk
Emissions from electricity use (Scope 2, - - 57,287 32,066 57,287 32,066
market-based – electricity) (tCO2-e)
Total net Scope 1,2 and 3 GHG emissions 339 485 111,640 77,096 111,979 77,581
(3)
(after UK and Australian renewable energy)
Carbon Offsets Retired 339 485 111,640 77,096 111,979 77,581
Net carbon emissions (carbon neutral) 0 0 0 0 0 0
and targets
(1) This data is an extract of the Group’s full energy and GHG emissions inventory data to satisfy SECR requirements. A full set of the Group’s assured energy use and
emissions data is available in the Group’s 2022 Sustainability Data Pack.
Metrics
(2) 2021 emissions were restated due to the addition of inventory items for BNZ and JBWere’s Toitu carbon neutral certification. JBWere’s Scope 3 emissions increased
by 6.4 tCO2-e to include emissions from waste to landfill. BNZ's Scope 3 emissions increased by 1,038 CO2-e to include emissions from postage, freight and
courier services.
(3) London Branch operations consume no Scope 1 diesel for stationary energy purposes (backup generators). The Group (excluding London Branch) figures include
diesel used for backup generators (2021: KWh – 273,925 and tCO2-e – 69; 2022: KWh 294,722 and tCO2-e - 74). The Total net Scope 1, 2 and 3 GHG emissions (after
accounting for UK and Australian renewable energy) figures also includes Scope 1 refrigerant gases from Australian and New Zealand vehicle fleets and heating,
ventilation, and air conditioning systems and domestic refrigeration in offices and branches.
(4) The Group has used ‘Underlying profit’ as a financial metric (rather than other financial measures of profit or economic activity) for normalisation of its
environmental performance as this allows for meaningful comparison to prior years’ data and to financial intensity measures used in the Group's Sustainability Data
information
Supporting
Pack and CDP disclosures due to the nature of its underlying business activities.
Methodology
The Group reports its energy and GHG data based on operational control. Energy consumption data is captured through utility
billing; meter reads or estimates.
The Group has applied the latest emission factors available at the time of reporting to the current year. Refer to methodology
documents on the Group website at www.nab.com.au/about-us/social-impact/environment/climate-change for a full list of
the emissions factor sources. Prior year figures reflect the emissions reported in that year, unless otherwise stated. United
Kingdom-based emissions were calculated using factors provided by the United Kingdom Department for Business, Energy &
Industrial Strategy.
Intensity ratio calculations have been calculated using location-based emission factors.
The financial intensity metrics in Table 10 use an activity data numerator which is reported for the Group’s environmental
reporting year (1 July – 30 June) and a financial metric denominator which is reported for the Group’s financial year (1 October–
30 September). This is to ensure that the Group uses metrics which are publicly available as much as possible and because of the
difference in the Group's environmental reporting and financial years.

Supporting information
TCFD Content Index
TCFD Recommendation Page or web reference
Governance
Describe the board’s oversight of climate-related risks and opportunities. • The Board's role, including assessment of
Board expertise is described on page 3.
Further detail is available in the 'Corporate
Governance Statement' section from
page 56 of the Group's 2022 Annual Report.
Describe management’s role in assessing and managing climate-related risks • Management's role is described on page 4.
and opportunities.
Strategy
Describe the climate-related risks and opportunities the organization has identified • Processes to integrate climate-related risks
over the short, medium, and long term. are described on page 13.
Describe the impact of climate-related risks and opportunities on the • Potential impacts of risks identified are
organization’s businesses, strategy, and financial planning. described on page 13.
Describe the resilience of the organization’s strategy, taking into consideration • NAB's consideration of resilience to different
different climate-related scenarios, including a 2°C or lower scenario. climate-related scenarios is described on
pages 15-17.
Risk management
Describe the organization’s processes for identifying and assessing climate- • Process for identifying and assessing climate-
related risks. related risks detailed on pages 12-13.
Describe the organization’s processes for managing climate-related risks. • Process for managing climate-related risks
detailed on page 14.
Describe how processes for identifying, assessing, and managing climate-related • Processes to integrate climate-related risks
risks are integrated into the organization’s overall risk management. are described across pages 12-15.
Metrics and targets
Disclose the metrics used by the organization to assess climate-related risks and • Metrics are disclosed on pages 19-20, and
opportunities in line with its strategy and risk management process. cover financed and operational emissions,
exposure to emissions-intensive or sensitive
sectors and finance intended to drive
positive impact.
Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) • The Group's Scope 1, 2 and where relevant
emissions, and the related risks. Scope 3, operational emissions are disclosed
on pages 36-37.
• NAB's Scope 3 financed emissions are available
on page 23.
Describe the targets used by the organization to manage climate-related risks and • The targets that have been set by the Group
opportunities and performance against targets. and NAB are disclosed on pages 19-35.

Supporting information (cont.)
Net Zero Banking Alliance - Requirements summary index
Our approach to
climate change
Net Zero Banking Alliance Requirements Action taken Refer to
Transition the operational and attributable GHG • Carbon neutral for operational emissions • Page 35
emissions from their lending and investment since 2010. • Page 21
portfolios to align with pathways to net-zero by 2050 • Goal set to align to net zero for lending by 2050.
or sooner.
Within 18 months of joining, set 2030 targets (or Interim targets have been set for: • Pages 21-33.
sooner) and a 2050 target, with intermediary targets • Power generation.
to be set every 5 years from 2030 onwards.
• Thermal coal.
Governance
• Oil and gas.
• Cement.
Banks’ first 2030 targets will focus on priority sectors • Initial target-setting has covered the most • Pages 21-33.
where the bank can have the most significant emissions-intensive sectors where NAB has
impact, ie. the most GHG-intensive sectors within sufficient quality data.
their portfolios, with further sector targets to be set • Targets covering the remainder of sectors will be
within 36 months. published by May 2024 at the latest in line with
NZBA requirements.
Annually publish absolute emissions and emissions • Published financed emissions attributable to • Page 23
intensity in line with best practice and within lending portfolio since 2020. • Page 5
Strategy
a year of setting targets, disclose progress • Refreshed climate strategy.
against a board-level reviewed transition strategy
setting out proposed actions and climate-related
sectoral policies.
Take a robust approach to the role of offsets in • NAB's approach to achieving carbon neutrality • Page 35
transition plans. prioritises the avoidance and reduction of • Page 25
emissions, with offsets purchased for emissions
that remain.
• Work is under way to further develop NAB's ability
management
to assess customers' transition plans, including
their approach to offsets.
Risk
and targets
Metrics
information
Supporting

Financed emissions methodology

The Group’s approach to
financed emissions
In 2021, the Group released its baseline estimate of attributable financed emissions for eight key segments of its Australian
lending portfolio: power generation, heavy manufacturing, resources, transport, agriculture, small and medium enterprises,
residential real estate, and commercial real estate. Emissions were attributed to the Group in accordance with the Partnership
for Carbon Accounting Financials (PCAF) greenhouse gas (GHG) accounting methodologies, as outlined in the first edition
of PCAF’s Global GHG Accounting and Reporting Standard for the Financial Industry (PCAF Standard)(1), with the exceptions
detailed below.
In 2022, the Group made a number of key changes to its baselining methodology to improve the accuracy and coverage of its
financed emissions baseline, and to improve alignment with the UNEP FI Guidelines, including which emissions-intensive sectors
to cover. These changes include:
• Matching the reporting dates of customer Exposure based estimates to calculate emissions for customers
at Default (EAD) with emissions data, to calculate where reported emissions data was not available.
attributable financed emissions. In 2021, NAB’s financed • Aligning the sectors included in NAB’s financed
emissions were estimated using EAD data from 30 June emissions reporting with UNEP FI’s list of carbon-
2021, however, the emissions data used was from 30 June intensive sectors(4). As a member of the NZBA, the Group is
2020, as 2021 emissions data, reported under the National required to set decarbonisation targets for all, or a
Greenhouse and Energy Reporting Act, was not available substantial majority, of carbon-intensive sectors
at the time of NAB's published reporting.(2) This year, to stipulated by UNEP FI. These sectors are: power
improve accuracy, NAB has aligned the dates used for its generation, coal, oil and gas, cement, commercial real
2022 financed emissions estimate to 30 June 2021. This estate, residential real estate, iron and steel, agriculture,
does result in a lag between the date of the Group's transport and aluminium. To support consistency between
reporting period end (30 September 2022) and the relevant the Group’s financed emissions reporting and its target
reporting period of customer emissions data (30 June setting activities, the Group will now report financed
2021). The Group will continue to work with customers, emissions for the 10 carbon-intensive sectors outlined in
industry, government and partners to improve the quality the UNEP FI Guidelines for Climate Target Setting for Banks.
and timeliness of emissions data over time. As a result of this re-alignment, the only reduction in
• Improving the level of coverage of the Group’s financed coverage is a small loss in SMEs where individual firms were
emissions baseline, by expanding the geographic boundary unable to be allocated between the 10 emissions-
of the baseline to include international exposures intensive UNEP FI sectors. The Group shall work to improve
(excluding Bank of New Zealand exposures(3)) for relevant its access to data quality and insights to help reduce
sectors, and by supplementing the baseline dataset with emissions in sectors beyond the 10 UNEP FI emissions-
production-based and revenue-based and other financial intensive sectors.
Table 11: Geographic boundary and scope inclusions for the Group’s 2022 attributable financed
emissions estimate
Exposure at Exposure at Default Geographic Operational
Sector
Default ($bn) (% of NAB's total EAD) boundary(1) boundary
Power generation 5.8 0.67% Global Scope 1 and 2
Thermal coal 0.7 0.09% Global Scope 1, 2 and 3
Oil and gas 1.9 0.22% Global Scope 1, 2 and 3
Cement 0.8 0.09% Global Scope 1 and 2
Commercial real estate 6.0 0.70% Australia Scope 1 and 2

(office and retail)
Residential real estate 365 42.33% Australia Scope 1 and 2
Iron and steel 0.2 0.02% Global Scope 1 and 2
Agriculture 30.6 3.55% Australia Scope 1 and 2
Transport 9.6 1.11% Global Scope 1 and 2
Aluminium 0.05 0.01% Global Scope 1 and 2
(1) Global excludes Bank of New Zealand exposures.
(1) Available at: https://carbonaccountingfinancials.com/files/downloads/PCAF-Global-GHG-Standard.pdf

(2) The Clean Energy Regulator publishes emissions data for companies reporting under NGER Act reporting period of July-June in February of the following calendar year.
The Group's reliance on this information results in a lag between when companies report their data, and when NAB publishes its financed emissions.
(3) Bank of New Zealand is a subsidiary of NAB.
(4) Sectors listed in this section are set out in UNEP FI Guidelines for Climate Target Setting for Banks, Guideline One – Additional Guidance.

Partnership for Carbon Accounting methods have been used. These include utilisation of recent
Financials (PCAF) alignment
Our approach to
purchase prices of assets and comparable asset valuations
climate change
(scaled based on production).
NAB’s financed emissions calculations are intended to align
(1)
with the PCAF methodology with the following exceptions .
Estimation approaches
Definition of EAD in financed emissions reporting NAB applies two approaches to estimating financed emissions
based on the availability of data:
PCAF’s definition of EAD encompasses on-balance sheet loans
and lines of credit only.(2) NAB has expanded its definition of 1. A bottom-up approach – based on individual company
EAD to include: GHG data.
• Any on-balance sheet loans and lines of credit with 2. A top-down approach – based on industry-level data where
Governance
unknown use of proceeds to businesses, non-profits, and bottom-up information was unavailable.
any other structure of organisation. These approaches are detailed below.
• Revolving credit and overdraft facilities, and business loans
secured by real estate, such as commercial real estate- Bottom-up approach
secured lines of credit. The bottom-up approach was applied to sectors where
• Business loans, short-term debt and lines of credit. some individual company emissions data was available. In the
first instance, emissions data was sourced from customer-
NAB’s definition of EAD for use in financed emissions
reported sources, including data reported to the Australian
reporting excludes:
Clean Energy Regulator under the NGER Act, as there is high
Strategy
• Derivatives (excluded as movement in foreign exchange or confidence in the quality of this data.
commodity prices are not related to underlying lending).
If individual company data was not available, the PCAF data
• Rehabilitation performance guarantees for thermal coal, hierarchy, as documented in the PCAF Standard, was followed
and oil and gas. to complement and complete the dataset. The hierarchy
• Australian Energy Market Operator (AEMO) bonds for specifies that:
power generation. • If reported emissions are not available, emissions should
This is a conservative approach to cover the broader be calculated using production-based estimates.
management
exposures of the bank, not only limited to cash flows. • If production information is not available, emissions should
Rehabilitation performance guarantees have been excluded be calculated using revenue-based estimates.
Risk
as they are not directly linked to any emissions-generating
• If revenue-based estimates are not available, sector-wide
activities, given they are to be used for the rehabilitation of
averages are to be used.
existing thermal coal mining, and oil and gas assets. AEMO
bonds have been excluded as they are for energy security The Group will continue to refine its methodologies and data
purposes. That is, AEMO requires credit support for any entity and seek to expand its coverage using primary data sources in
not regulated by the Australian Prudential Regulation Authority future years.
in order to approve their participation in domestic electricity As outlined in Table 12, the bottom-up approach was applied
and targets
and gas markets. to Corporate and Institutional Banking exposures. Business
Metrics
The Group's EAD for use in financed emissions baselines and Banking exposures were only included for sectors where more
sector targets currently excludes Business and Personal Bank than 5% of the overall sector EAD was derived from Business
exposures in sectors where it accounts for less than 5% Bank customers. Sectors where this applies are indicated in
sector EAD, as well as NAB's New Zealand banking subsidiary the table below. Bank of New Zealand exposures have been
BNZ, which has separately signed up to the NZBA. Over time, excluded from this process.
it is intended that BNZ's financed emissions will be brought
into the Group's baselines, targets and reporting. You can Table 12: Exposures included for bottom-up approach
information
for financed emissions methodology(1)
Supporting
learn more about BNZ's progress in its forthcoming climate
and sustainability reporting. Sector Corporate and Business Bank
Institutional
NAB has considered its on-balance sheet securities "held for
Power generation Y N
the purposes of investment"(3) in its financed emissions
reporting. These include equity investments made by NAB Thermal coal Y N
Ventures, which do not currently include any investments Oil and gas Y N
made in the sectors for target setting. Cement Y N
Commercial real estate Y Y
Other departures
Iron and steel Y N
PCAF outlines financed emissions calculation methodologies
by asset class, (e.g. business loans and unlisted equity, Transport Y Y
mortgages etc.) however, NAB has reported its financed Aluminium Y N
emissions at a more granular industry sector level as NAB (1) Y = Exposures for the division have been included in the sector financed
considers this provides a more detailed and meaningful emissions estimate. N = Exposures for the division have not been included in
representation of its lending portfolio. the sector financed emissions estimate.
Where the PCAF valuation method has been deemed unable

to be followed due to missing data points such as in the oil
and gas or power generation sectors, alternative valuation
(1) The Group's policy is to rebaseline where emissions have exceeded a 5% variance based on new or more accurate data.
(2) Page 45 of the PCAF Standard, available at: https://carbonaccountingfinancials.com/files/downloads/PCAF-Global-GHG-Standard.pdf
(3) Page 7 of UNEP FI Guidelines outlines that on-balance sheet securities held for the purposes of investment should be included and those held for client
facilitation and market-making purposes are excluded.

Top-down, intensity measure approach emissions (or earlier years), or approximate sector-wide
A top-down approach using industry-level emissions intensity emissions intensities and ratios.
data was applied to estimate the Group’s financed emissions Once the above approach had been applied, if there was
for the below sectors. still a gap to 100% coverage due to some customers having
• Residential real estate. no data available, the remaining emissions were estimated.
To reach full coverage, emissions totals were extrapolated
• Agriculture.
from known datasets utilising ANZSIC(3) groupings on a tCO2-
The Group has applied its own emissions estimation e/$m EAD basis to complete an emissions estimate for the
methodologies for residential real estate and agriculture, and remaining customers in the sample.
is monitoring the development of methodologies by industry
Emissions were then attributed to the Group in proportion to
initiatives, including PCAF and NZBA, for attributable financed
the Group’s EAD as at 30 June 2021 to the customer, as a
emissions estimation and portfolio temperature alignment
percentage of the customers’ enterprise value as at 30 June
for these sectors in order to refine its measurement
2021. For publicly listed customers, the enterprise value as
methodology going forward.
at 30 June 2021 was sourced from company reports, Eikon
A more detailed description of the methodologies used to and Bloomberg.
estimate the Group’s attributable financed emissions for each
For unlisted companies or special purpose vehicles, valuations
sector is provided over the following pages.
were estimated within the Group as at 30 June 2021, and
were used to attribute the proportion of financed emissions
Financed emissions methodology by sector to the Group. This process aligns to pages 61-64 of the
Power generation, thermal coal, oil and gas, cement, PCAF Standard for corporate finance and pages 70-72 for
iron and steel, transport and aluminium project finance with the exceptions noted above in the
PCAF alignment section. Where the necessary data points
For these sectors, the bottom-up approach to estimating
were not always available, such as for some private assets,
financed emissions was applied. In the first instance, the
similar assets with valuations were used and scaled based
Group estimated attributable emissions for these sectors
on production, or recent purchase prices were referenced to
using data from customer-reported sources, including:
estimate their value - these were provided by NAB’s Corporate
• National Greenhouse and Energy Reporting (NGER) data and Institutional bankers. NAB’s assessment of data quality
sourced from the Clean Energy Regulator’s website - for these sectors, in accordance with the PCAF Standard, is
Australia only. provided in the data quality assessment table on page 49.
• United States Environmental Protection Agency (EPA)
Greenhouse Gas Reporting Program data sourced from the Commercial real estate
US EPA website - USA only. The bottom-up approach was also used for commercial
• Disclosures published under CDP. real estate. The Group calculated emissions for this sector
based upon actual reported emissions under the Commercial
• Customer reports such as annual reports, climate reports Building Disclosure Program(4) for the period ended 30 June
and sustainability reports. 2021. Valuations corresponded to this period and were derived
If individual company data was not available, the PCAF from external and independent valuations.
data hierarchy, as documented in the PCAF Standard, was
Emissions were then attributed to the Group in proportion
followed to complement and complete the dataset. This
to the Group's EAD as a share of the known valuation of
involved calculating customer emissions using production-
(1) each building as at 30 June 2021. Where emissions were
based estimates and revenue-based estimates, and GHG
not available for financed buildings, but floor area was, an
emissions factors. Emissions factors were applied according
average State emissions intensity factor per square metre
to the country the asset was operating in. Where an emissions
was sourced from the National Australian Built Environment
factor could not be sourced, factors were used from the
Rating System (NABERS), and used to estimate emissions
nearest country for which the Group had data. Relevant
based on floor area. This process aligns to pages 79-80 of the
emissions factors and intensity figures were sourced from:
PCAF Standard for commercial real estate. NAB’s assessment
• The NGER Determination applicable to the 2020-2021 of data quality for this sector, in accordance with the PCAF
reporting period - Australia. Standard, is provided in the data quality assessment table on
• The National Greenhouse Accounts Factors (August 2021) page 49.
- Australia. No extrapolation was applied to Commercial Real Estate
• Emissions Factors for Greenhouse Gas Inventories - to avoid sampling bias as only the Group's green bond
United States. commercial real-estate portfolio has been estimated using
the above methodology, at present(5). Further efforts will be
• International Energy Agency Net Zero by 2050 scenario
made to increase coverage in the future.
global cement pathway (due to regional factors not
being available).
Residential real estate
• Environmental impact assessments.(2) The top-down intensity measure estimation approach was
Where 2021 emissions data was not available, data from adopted for the residential real estate sector. The Group
the closest available year was utilised. This included 2020 estimated the absolute attributable emissions for residential
(1) Production based estimates were used to estimate Scope 3 emissions in the oil and gas and coal sectors.
(2) An environmental impact assessment is the process of assessing the likely or possible environmental impacts of a proposed project or development, before a
decision is made as to whether the project should proceed or not, and if so, under what conditions.
(3) Australian and New Zealand Standard Industrial Classification.
(4) The Commercial Building Disclosure Program is managed by the Australian Government Department of Climate Change, Energy, the Environment and Water. It aims
to improve the energy efficiency of Australia’s largest office buildings, by requiring energy efficiency information, including emissions data, to be provided in most
cases where commercial office space of 1000 square metres or more is offered for sale or lease.
(5) CRE emissions currently only cover 9% of the Group's portfolio.

real estate for all States and Territories in Australia by applying livestock (sheep, beef, poultry, pigs, and dairy), grains, cotton,
Our approach to
an average GHG intensity factor per dwelling to the number of cropping, horticulture, sugarcane and forestry.
climate change
dwellings financed by the Group in each State and Territory. A As there was some uncertainty with respect to the estimation
loan to valuation at time of origination ratio (LVR) was applied of dairy emissions, the Group took a conservative approach
in alignment with the methodology described on page 85 of and uplifted total emissions by 16% to ensure adequate
the PCAF Standard. coverage of dairy sector emissions. This uplift was used
The steps taken to estimate attributable emissions as it is NAB’s view that the national equity ratio was
associated with residential real estate were as follows: underrepresenting the dairy sector, therefore a secondary
• Total state-based residential energy consumption figures source – the Dairy Farm Monitoring Project (DFMP) and the
(gas and electricity) were sourced for the residential equity ratio contained within – was used to calculate the uplift
to emissions. The Group’s attributable emissions estimate
Governance
sector in each State and Territory as disclosed in Table
F of the Australian Energy Statistics – Australian Energy associated with the dairy sub-sector EAD was based on the
Update 2022. following approach:
• State and Territory electricity and natural gas emissions • Identifying average emissions per dairy farm based on Dairy
factors were sourced from the National Greenhouse Australia’s DFMP Annual Report 2021-22 for Victoria(2) (given
Accounts Factors (August 2021) and the National 74% of NAB’s dairy customers in this period were located
Greenhouse and Energy Reporting (Measurement) in Victoria).
Determination 2008. • Multiplying the average emissions per farm by the average
• Total state-based residential GHG emissions were then debt based on Dairy Australia’s DFMP Annual Report 2020-21
Strategy
calculated by applying the emissions factors to total for Victoria.(3)
residential energy consumption. • Multiplying the per dairy farm emissions figure by the
• The total number of dwellings in the 2021 period ending number of dairy customers with lending provided by
30 June 2021 was sourced from the number of dwellings the Group.
reported by the Australian Bureau of Statistics (ABS) from Using the methodology outlined above, the coverage
the 2021 Australian census per state and territory. achieved for the Group’s attributable share of Australian
• The total emissions for each State and Territory were then agricultural emissions is 100%. The Group will continue to refine
management
divided by the estimated number of dwellings per State and this methodology for future estimates as data availability and
Territory to provide an estimated emissions per dwelling quality improves. NAB’s assessment of data quality for this
Risk
figure for each State and Territory. sector, in accordance with the PCAF Standard, is provided in
the data quality assessment table on page 49.
• The emissions per dwelling for each State and Territory
were then multiplied by the abovementioned LVR ratio, then
by the total number of NAB mortgages for each State and
Territory to estimate the attributable financed emissions
relevant to the Group’s Australian residential mortgages by
State or Territory.
and targets
Metrics
• The State and Territory dwelling-related GHG emissions
totals attributable to the Group’s financing were then
aggregated to provide a total figure attributable to the
Group’s Australian mortgage portfolio.
This approach allowed the Group to achieve a coverage
of 100% for emissions from residential real estate. This
process aligns to pages 85-86 of the PCAF Standard for
mortgages. NAB’s assessment of data quality for this sector, in
information
Supporting
accordance with the PCAF Standard, is provided in data quality
assessment table on page 49.
Agriculture
The Group developed a top-down approach to estimating its
attributable financed emissions from the agriculture sector.
This involved estimating a share of emissions associated with
its agribusiness customers based on total agribusiness EAD
by attributing a share of 2021 total emissions disclosed in
the Paris Agreement Inventory relative to the Group’s market
share for agriculture.
To support this approach, the Group applied an average debt-
to-equity ratio of 11.9%, which was provided in the 2021 survey
data published under the Australian Bureau of Agricultural
and Resource Economics and Sciences Farm Data Portal(1) to
attribute the Group’s share of total sectoral-based emissions
relative to EAD. Financed emissions were estimated for the
following Australian agricultural sub-sectors: aquaculture,
(1) Data provided under equity ratio as at 30 June for all farm types.
(2) Refer Table 1 for net emissions per farm (20-21 figure used).
(3) Refer Table A6 'Capital Structure - Statewide'.

Complexities and limitations in measuring financed • The Group’s customer-base is not fixed. Changes to the
emissions and setting targets Group’s customer base over time can alter both the
Climate-related metrics are underpinned by methodologies absolute level of financed emissions and the intensity of
containing uncertainties, assumptions and judgements that financed emissions. In addition, revenue and production
limit the extent to which they can be relied upon. This applies for individual customers is volatile and subject to
to all climate-related metrics, including (without limitation) variation year-on-year.
historical metrics relating to emissions and forward-looking • The reliance on customer data can lead to significant lags
climate metrics, such as goals, targets, climate scenarios or between the time of the emissions being generated, and
projections and pathways. the publishing of the Group's financed emissions reporting.
A summary of the Group’s understanding of the For example, financed emissions data published in NAB's
main challenges associated with climate-related data, 2022 Climate Report is based on emissions data, and in
methodology and metrics follows. This is a non-exhaustive order to match this timing, EAD, as at 30 June 2021.
thematic summary of certain key risks that are relevant • Scenarios, and customers' transition plans, may have
to consider in relation to climate related metrics and varying reliance on the commercialisation of currently
information, but they are not the only risks, and each thematic unproven technologies to meet emissions reduction
risk will in turn involve a range of particular and specific risks targets. Investment in these technologies may fail
that impact the quality, utility and effectiveness of climate- to achieve the intended outcomes. Overreliance on
related information: unproven technologies to meet targets may impact NAB’s
• Data availability, quality and timeliness vary considerably assessment of those transition plans.
within and across businesses, industries and geographies. These challenges reduce the accuracy of estimated financed
This impacts both the ability to measure existing financed emissions, and mean that targets may not always be achieved
emissions and to set appropriate targets to reduce despite the Group using best efforts to pursue its targets.
financed emissions. Measurement of financed emissions
is, in many cases, based on estimates, and relies on Challenges in allocating emissions to sectors
data that the Group does not generate or control. The
ANZSIC codes
methodologies for estimating and calculating greenhouse
gas emissions or emissions intensities and other climate- When a lending transaction is created in NAB’s systems, for
related metrics vary widely in their approaches. This may most loans, the relevant customer is assigned an ANZSIC
result in under or overestimates of climate-related risks or code based on their primary business activity. It is not NAB’s
performance and/or financed emissions. current practice, and NAB does not consider it to have been
historic common industry practice, to assign or otherwise
• While there has been improvement, there is a lack of
record secondary ANZSIC codes for customers with diversified
common definitions and standards for reporting climate-
business activities.
related information, which may impact on the accuracy
of estimates of financed emissions and targets based As such, under NAB’s current methodology, estimated
on existing estimates. In particular, climate metrics, customer emissions and sector-specific emissions estimates
measurement, other methodologies and reporting are are applied to each customer’s EAD with the assumption that
not supported by a globally accepted framework or the emissions are 100% attributable to the assigned primary
standard that facilitates efficiency, comparability and business activity. Accordingly, if a customer is diversified
transparency. Frameworks and methodologies are often across business activities, the estimate of their emissions
voluntary and a range of frameworks and methodologies may be under or overstated in sectors for which they have
are used by corporate organisations reporting on climate secondary operations.
related information and metrics. This makes comparison by Further limitations associated with reliance on ANZSIC codes
investors and others evaluating the climate performance to identify financed emissions, which could impact the
of corporate organisations difficult. accuracy of the sector under which financed emissions are
• Estimating financed emissions is complex and requires captured and/or the accuracy of total financed emissions
significant methodological choices, judgements and captured, include:
assumptions. Methodologies to estimate financed • The possibility of manual processing error in ANZSIC coding
emissions are evolving as understanding increases and at the time of loan origination and/or renewal.
data availability changes. This means methodologies used
• Lending is undertaken by NAB without an ANZSIC code being
to estimate financed emissions are likely to change over
recorded for the borrower. Manual efforts to identify such
time, impacting existing estimates, and targets based on
lending may not have been successful.
existing estimates.
• When setting targets for reducing financed emissions, UNEP FI Guidelines 5% revenue threshold
the inherent uncertainty in estimating financed emissions The UNEP FI Guidelines outline that any bank client with more
is exacerbated by the long time periods involved, for than 5% of their revenue coming directly from thermal coal
example, to set targets aligning to net zero by 2050. mining, and electricity generation activities, shall be included
• Climate science, and the decarbonisation trajectory that in the scope of targets.
it implies, is continually evolving. Climate scenarios are To identify and include emissions from companies with greater
inherently uncertain, and there are limitations of climate than 5% of revenue generated directly from thermal coal
modelling, including climate scenario modelling. Climate mining or coal-fired electricity generation, NAB has matched
scenarios are modelled over a significantly longer time- a global database of coal mines and coal generation assets to
frame than more traditional financial scenario modelling its customer list to identify customers with associated coal-
and therefore the complexity and risk of error is higher. based assets and revenues.
• Many factors relating to the achievement of financed
There are particular challenges associated with identifying
emissions reduction targets are outside the control of
diversified companies for this purpose, involving significant
the Group.

manual processing and analysis. It is often the case
Our approach to
that small, diversified mining companies do not disclose
climate change
breakdowns of their revenue or production, making it
extremely difficult to identify them for the purposes of the
5% revenue threshold. To address this, NAB applied a series
of materiality thresholds in performing this analysis, including
a $1 million EAD floor. This has the potential to result in some
customers, who are classified outside the power generation
or thermal coal mining sector, with relatively low absolute EAD,
but who derive greater than 5% of revenues from thermal coal
mining, not being identified within NAB’s thermal coal or power
Governance
generation targets.
For more details on NAB's methodology, refer to Table 15 on
page 49.
Actual emissions and emissions intensity values are inclusive
of both Scope 1 and Scope 2 emissions for all sectors, as well
as Scope 3 emissions for thermal coal, and oil and gas. As
such, the Scope 1 emissions created by the power generation
sector are included in the total Scope 2 emissions for all other
sectors. In order to fairly present emissions arising within each
Strategy
sector, the Group has included this ‘double-count’ within its
attributable emissions estimate.
management
Risk
and targets
Metrics
information
Supporting

Target Setting Baseline Methodology

Target scope and boundaries
In line with the UNEP FI Guidelines, NAB is setting 2030 decarbonisation targets for 10 carbon-intensive sectors by May 2024. These
sectors are: power generation, thermal coal, oil and gas, cement, commercial real estate, residential real estate, iron and steel,
aluminium, agriculture and transport.
NAB has prioritised setting targets for the most emissions-intensive sectors in its lending portfolio(1), and where there is
sufficient data availability and quality to set credible targets: power generation, thermal coal, oil and gas, and cement. The
Group is working to collect higher quality emissions data to support target setting across the remaining six emissions-intensive
sectors identified in the UNEP FI Guidelines, as well as to support the Group's ability to include customer Scope 3 emissions for all
sectors over time.
An overview of the coverage, scope and boundaries of NAB’s first tranche of 2030 decarbonisation targets is provided below.
Table 13: Coverage and boundaries associated with NAB’s 2030 decarbonisation targets
EAD
Operational Geographic
Sector EAD ($bn) (% of NAB’s Metric
boundary boundary(1)
total EAD)
Power generation 5.8 0.67% Scope 1 and 2 Global tCO2-e/MWh
Thermal coal 0.7 0.09% Scope 1, 2 and 3 Global MtCO2-e
Oil and gas 1.9 0.22% Scope 1, 2 and 3 Global MtCO2-e
Cement 0.8 0.09% Scope 1 and 2 Global tCO2-e/t
(1) Global excludes BNZ exposures.
PCAF alignment
Emissions baselines and alignment with PCAF have
been determined as outlined in the 'Financed emissions
methodology' on pages 40-45.
PCAF outlines financed emissions calculation methodologies
by asset class (e.g., business loans and unlisted equity,
mortgages etc.) however, NAB has reported its attributable
financed emissions at a more granular industry sector
level as NAB considers this provides a more detailed and
meaningful representation of its lending portfolio, and enables
consideration of industry sector-specific information.
Where the PCAF valuation method has been deemed unable
to be followed due to missing data points, such as in the oil
and gas or power generation sectors, alternative valuation
methods have been used. These include utilisation of recent
purchase prices of assets and comparable asset valuations
(scaled based on production).
Sector definitions
The following subsector definitions and categories have been
used to capture all Corporate and Institutional Bank exposures
in the emissions baselines for the Group’s targets, excluding
exposures held by the Bank of New Zealand. In line with UNEP
FI Guidelines, NAB has defined its sectors in accordance with
nationally and internationally recognised sector classification
codes, ANZSIC 1993 and 2006, and International Standard
Industrial Classification of All Economic Activities (ISIC) Rev. 4.
(1) Based on Australian emissions: Scope 1 and 2 tCO2-e / $m EAD.

Table 14: Sector definitions for NAB’s target setting emissions baseline
Our approach to
climate change
Sector NAB definition(1) ANZSIC (1993) ANZSIC (2006) ISIC (Rev. 4)
Thermal coal Black Coal Mining - Steaming 1101 0600 0510
Brown Coal Mining 1102 0600 0510
Brown Coal Mining Not Elsewhere Classified (NEC) 1102 0600 0510
Lignite Mining 1102 0600 0520
Oil and gas Gas, Natural Extraction 1200 0700 0620
L.N.G. Production At Wellhead 1200 0700 0620
Liquefied Petroleum Gas Production 1200 0700 0620
Governance
Natural Gas Separation At The Wellhead 1200 0700 0620
Oil Shale Mining 1200 0700 0610
Oil and Gas Extraction NEC 1200 0700 0610, 0620
Cement Cement Mfg (Except Adhesive Or Refractory) 2631 2031 2394
Hydraulic Cement Mfg 2631 2031 2394
Portland Cement Mfg 2631 2031 2394
Other Cement and Lime Manufacturing NEC 2631 2031 2394
Power generation Electricity Generation 3610 261 3510
Strategy
Electricity Generation Using Coal 3610 2611 3510
Electricity Generation Using Gas 3610 2611 3510
Hydro-Electric Power Generation 3610 2612 3510
Renewable Energy 3610 2619 3510
Wind Farms 3610 2619 3510
(1) The Group has used an internal classification system that provides greater granularity than ANZSIC 4 digit. The names of sectors included in the Group's targets and the
management
concordance to ANZSIC 4 digit 1993 and 2006 are found within the table.
Risk
Companies with significant operations in one of the Figure 13: Absolute emissions baseline calculation
categories specified above, but which are classified under methodology for business loans and unlisted equity
a different sector, have been included on the advice of
NAB’s banking team. This provides the Group with a more
comprehensive view of its attributable financed emissions
that may not have been captured under a stricter use of
the classification.
and targets
Metrics
Target metrics
The Group has set physical emissions intensity targets
for power generation and cement, and absolute emissions
reduction targets for oil and gas and thermal coal. NAB
considers physical intensity metrics appropriate for power
generation and cement, as each of these sectors will require
growth to support living standards and expected population
Source: PCAF Standard, page 63.
increases. In alignment with the Group’s chosen reference
information
Supporting
scenario, IEA NZE 2050, physical intensity targets will require
Figure 14: Absolute emissions baseline calculation
emissions reductions to outweigh growth in output, ultimately
methodology for project finance
supporting real world emissions decreases. Key scenario
assumptions and limitations are shown in Table 17.
Setting absolute targets for thermal coal and oil and gas is
designed to achieve an absolute reduction in lending over
time to these sectors. NAB considers it appropriate to adopt
absolute targets for fossil fuel industries, as decline in the use Source: PCAF Standard, page 63.
of fossil fuels is a key driver of emissions reductions in the
Group’s chosen reference scenario. For sectors where emissions intensity targets have been
set, the baselines have been calculated using the approach
Establishing a baseline illustrated in Figure 15. This approach, known as the weighted
average method, involves weighting company-level emissions
Calculation methodologies intensities by the outstanding loan amount for each customer.
For sectors where absolute emissions targets have been set, This approach is consistent with global peers(1) and removes
the baselines have been calculated using the approaches the need to use company valuations in financed emissions
illustrated in Figures 13 and 14. estimations when calculating emissions intensity.
(1) A benchmarking exercise was undertaken to assess how global and local peers have calculated intensity measures. This method was found to be commonly used
across multiple peer banks.

Figure 15: Physical emissions intensity baseline • The NGER Determination applicable to the 2020-2021
calculation methodology reporting period - Australia.
• The National Greenhouse Accounts Factors (August 2021)
- Australia.
• Emissions Factors for Greenhouse Gas Inventories -
United States.
Treatment of lending for project finance and • International Energy Agency Net Zero by 2050 scenario
corporate entities global cement pathway (due to regional factors not
Lending can occur at a corporate level (for example, general being available).
facilities made available to the parent company of a group • Environmental impact assessments.
of companies), or at a project finance level, that is on an
Where 2021 emissions data was not available, data from
individual project basis for a specific project purpose.
the closest available year was utilised. This included 2020
NAB’s methodology has assigned EAD for project financing to emissions (or earlier years), or approximate sector-wide
the entity it was lent to as opposed to always aggregating emissions intensities and ratios.
this lending to the parent company of a group. This may mean
Once the above approach had been applied, there was still
that the consolidated lending of the relevant customer group
a gap to 100% coverage due to some customers having no
has separate line items for project finance and for corporate
data available. To reach full coverage, emissions totals were
lending. NAB has kept these items separate so as to preserve
extrapolated from known datasets utilising ANZSIC groupings
the valuation to EAD dynamics and apportion emissions as per
on an tCO2-e/$m EAD basis to complete an emissions estimate
the PCAF methodology. Emissions have been captured at the
for the remaining customers in the sample.
level of the corresponding counterparty where possible.
Production
Data collection
In addition to emissions data, production data was also
Emissions required for each customer to derive emissions intensity
In the first instance, the Group estimated emissions for power figures for power generation and cement. These production
generation, cement, thermal coal and oil and gas using data figures were obtained from a variety of sources, including:
from customer-reported sources, including: • Customer reports that state production levels.
• National Greenhouse and Energy Reporting (NGER) data • Operator data that states production levels.
sourced from the Clean Energy Regulator’s website • Publicly available third-party and industry reports that
(corporate data and designated generation facility data). provide production level data.
• CDP (formerly known as the Carbon Disclosure Project). • Revenue-based estimates that have used an assumed
• Customer reports such as annual reports, climate reports price for the particular commodity in question combined
and sustainability reports. with company revenue to derive an estimate of production.
If individual company data was not available, the PCAF data
Valuation
hierarchy, as documented in the PCAF Standard, was followed
to complement and complete the dataset. This involved Customers’ enterprise value as at 30 June 2021 for public
calculating customer emissions using production-based companies was drawn from Bloomberg, Eikon and company
estimates and revenue or other financial-based estimates, statements. For unlisted companies or special purpose
and greenhouse gas emissions factors, including sector-wide vehicles, valuations sought internally within NAB as at 30 June
emissions factors and averages. Emissions factors were used 2021 were used to attribute the proportion of financed
based on the country the asset was operating in, and where emissions. This process aligns to pages 61-64 of the
an emissions factor could not be found, factors were used PCAF Standard.
from the nearest country for which the Group had data.
Relevant emissions, emissions factors and intensity figures
were sourced from:

Table 15: NAB’s 5% revenue threshold methodology
Our approach to
climate change
Customer grouping Step Resulting
customers
NAB Corporate and Compiled list of Corporate and Institutional customers, including primary 47,000+
Institutional customers ANZSIC classification and EAD.
Customers with coal/power Used a Jaccard index(1) for customer names to asset owners in a global 15
asset ownership data base of 20,000 power stations and 3,000 coal mines.
Filtered out customers with <$1m EAD,(2) <90% customer-owned name
match confidence or with correct sector already assigned.
Customers not in existing Manually reviewed list to filter out customers where prior analysis has 8
sector analysis already reclassified into the correct sector.
Governance
Additional customers added Compared revenue from thermal coal/electricity sales to customer 1
to sector total revenue(3).
Where revenue was not available, estimates of revenue were based
on production, this was particularly relevant in the case of thermal coal
mining.
Majority of customers either used the coal/electricity for their own
operations (not sold) or sales constituted <5% of total revenue.
One customer was found to have >5% of revenues from thermal
coal sales.
(1) Jaccard index compares two sets of names to see which characters are used in both. It is used to gauge the similarity between two datasets, in this case databases
Strategy
of names, to identify similar matches.
(2) Refer to explanation of materiality thresholds for the 5% revenue threshold requirement on page 45.
(3) 2021 revenue figures were used.
Table 16: Data quality assessment

Sector Data quality
Power generation 1.7 (Scopes 1 and 2)
management
Thermal coal 1.4 (Scopes 1 and 2), 2.7 (Scope 3)
Risk
Oil and gas 2.1 (Scopes 1 and 2) 2.5 (Scope 3)
Cement 2.3 (Scopes 1 and 2)
Commercial real estate (office and retail) 1.0 (Scopes 1 and 2)
Residential real estate 5+ (Scopes 1 and 2)
Iron and steel 2.9 (Scopes 1 and 2)
Agriculture 5+ (Scopes 1 and 2)
and targets
Transport 4.0 (Scopes 1 and 2)
Metrics
Aluminium 1.6 (Scopes 1 and 2)
Table 17: NZE 2050 (2021): Scenario summary

Theme Summary of key points
Temperature • 1.5 degrees Celsius
alignment
Key scenario • Fast policy and technological change.
information
Supporting
assumptions • No new oil or gas developments beyond those with approvals in place as at 2021.
• 88% share of renewables in electricity generation by 2050.
• Limited use of carbon removals.
• Universal access to affordable, reliable, sustainable and modern energy services by 2030.
• International co-operation and recovery plans.
• Does not rely on emissions reductions from outside the energy sector.
• Carbon price is adopted in all regions, with an assumed price of USD130 by 2030 in advanced economies.
Limitations • Not derived from Intergovernmental Panel on Climate Change models.
• Trajectories lack granular local context: Australia is not currently designated as its own region.
• Only covers CO2 not CO2-e.
• Significant reliance on technological improvements.
Rationale • High sectoral granularity.
for selection • Global coverage – enabling the inclusion of offshore exposures.
• Well accepted and understood by customers, investors and peers.

Environmental financing target methodology

This section summarises the financing the Group considers to be eligible for inclusion in its target to
provide $70 billion in environmental financing to help address climate change and support the transition
to a low-carbon economy.
Specialised, corporate and securitisation This category also includes finance for low carbon
finance for projects that reduce emissions businesses such as renewable energy retailers, providers of
solar and energy storage systems and solar installers. Where
and assist with climate change adaptation
only a proportion of the activities or assets funded are
and finance to other low carbon businesses eligible, the Group only counts the proportion of funding
The Group's environmental finance target includes specialised provided that is attributable to the eligible activity or asset. If
lending, corporate and securitisation financing for various the lending is a syndicated facility only the Group proportion
activities which are set out in Table 18. is counted. All areas/sectors included in the table below.
Table 18: Eligible specialised, corporate and securitisation finance categories

Energy Energy Transport Water Waste Land-use Adaptation
efficiency management infrastructure
• Renewables • Green • Low-emission • Storm water • Waste-to- • Sustainable • Adapting
• Electricity commercial/ vehicles/ adaptation energy Forestry infrastructure
transmission residential efficient • Investments • Wastewater and supply to increased
and buildings transport to deal with treatment chains heat stress
distribution • Energy • Electric rainfall and • Sustainable • Ports
for efficiency vehicle volatility methane Agriculture redevelopment
renewables technology infrastructure • Water capture and supply to address sea
• Distribution / and • Cycling rental treatment chains level rise
management products schemes & and • Storm surge
• Products/ • Industrial infrastructure recycling protection
technology retrofits • Electric • Waterway
that support vehicle adaptation
smart grids infrastructure
• Data centres
using
Renewable
Energy
• Energy
storage
Green commercial property(1) All qualified lending under the Energy Efficient Bonus Scheme
was eligible and included towards the Group's environmental
This category of environmental finance includes new financing
financing target.
or re-financing of commercial property within NAB’s real
estate investment trust (REIT) customer base. The Group
includes finance for properties which rank within the top 15% of
Green term deposits
energy efficiency based on NABERs ratings referenced to the Money that had been deposited by customers into ubank’s
Climate Bonds Initiative calculator hurdle rates. The amount Green term deposits and was allocated towards lending for
of financing included for the respective REIT customer, where projects and assets where activities were eligible under
financing has occurred, is in proportion to the percentage NAB’s Green Bond Framework. Examples included lending for
of commercial property that sits within the top 15% of energy renewable energy, low-carbon public transport, low-carbon
efficiency in the marketplace for the specific REITs portfolio. buildings, energy efficiency and nature-based assets which
are eligible under the Climate Bonds Taxonomy and contribute
Asset finance to the sustainable development goals. Cumulative flow of
new deposits written has been included in historic progress
NAB’s Energy Efficient Bonus (discounted lending facility) was
towards NAB's cumulative target.
available to customers seeking finance for energy efficient
equipment in accordance with the Clean Energy Finance
Corporation’s “Approved Assets List” which sets out the
Green bonds funding
environmental thresholds that the equipment must meet to NAB, or NAB-related entity issued green bond funding is
qualify. This product has been discontinued. The various asset included towards its environmental financing target where
classes included were: the underlying activity funded is eligible under NAB’s Green
Bond Framework. If the Group is responsible for 100% of the
1. Vehicles.
issuance, then 100% of the bond issuance value is counted
2. Energy efficient equipment and lighting for buildings, towards the environmental financing target. If the Group is
industry and agriculture. arranging or managing the issuance for another non-NAB
3. Fuel efficient tractors and headers. entity then the Group only allocates the Group's proportion
4. Solar PV. towards the target. If the Group is a sole arranger of the
issuance, the Group includes the full issuance. Proceeds of
5. Batteries.
green bonds issued by the Group are used for investments
(1) Green commercial property was originally defined as a commercial building with a minimum 6-star certified NABERs rating. This methodology was updated in 2019. The
current methodology includes commercial property in the top 15% of NABERs ratings as defined by the Climate Bonds Initiative hurdle rates.

in renewable energy, low-carbon public transport, low-carbon 6-Star Residential properties

buildings, energy efficiency and nature-based assets which
Our approach to
climate change
Mortgages included towards the Group's environmental
are eligible under the Climate Bonds Taxonomy and contribute
financing target include new construction and major
to the sustainable development goals.
renovation of houses which rank within the top 15% of energy
Advisory, underwriting or efficiency based on the National House Energy Rating
Scheme (NatHERS) ratings. As a reference point, new
arranging activities construction and major renovation of houses undertaken
The Group includes the value of financing and bond issuances from 1 October 2015 onwards which have a minimum 6-Star
where it is advising, arranging or underwriting provided that NatHERS (or equivalent) energy efficiency rating are
the activities meet the definitions of green financing as per estimated to be within the top 15% of the national housing
NAB’s Green Bond Framework. If the Group is not the sole
Governance
stock in terms of energy efficiency. This includes residential
advisor, arranger or underwriter then the Group only includes financing provided for activities where the identified loan
the NAB proportion of the advisory, arranging or underwriting purpose is ‘Construction’ which typically includes new homes
activity towards the Group's environmental finance target. or major renovation activity where the borrower undertakes
a progressive drawdown of the loan amount. To estimate the
percentage of mortgages for houses with energy efficiency
within the top 15% of national housing stock, total housing
stock is calculated using ABS census data and Housing
Industry Association housing starts data.
Strategy
management
Risk
and targets
Metrics
information
Supporting

Emissions sources included in NAB Group’s 2022 Carbon Inventory for

operational emissions
United
New United
Emissions source Australia Asia Europe States of
Zealand Kingdom
America
Scope 1
Stationary energy – diesel X X

Stationary energy – gas X X X
Building-based refrigerants – in HVAC
X X X X
and refrigerators
Business travel - work use vehicle
X
fleet – (petrol, diesel, ethanol)
Business travel - work use vehicle
X
fleet – (petrol, diesel, electricity)
Work use vehicle fleet – air
X X
conditioning refrigerant
Scope 2
Electricity X X X X X X
Scope 3
A3 and A4 paper purchased X X X X X X

Base-building energy use (gas, diesel
and electricity) not under NAB’s X X
operational control
Business travel – air X X X X X X
Business travel – employee claims
for use of personal vehicles for X X
work purposes
Business travel – hotel stays X X X X X X
Business travel – rental cars X X X
Business travel – taxi use X X X X
Business travel – rail X X X
Transmission losses – base-building
X X
– Electricity
Transmission losses – base-building
X
– gas
Transmission losses – stationary
X
energy – diesel
X X X
energy – gas
X X X X X X
energy – electricity(1)
Transmission losses – Business travel
– work use vehicle fleet - (diesel, X
ethanol, petrol)
Transmission losses – Business travel
X
– work use vehicle fleet - Electricity
Offsite energy - electricity X X
Courier, Freight & Postage X
Customer Statements X
Materials recycled X
Waste to landfill X X X X
Waste to incineration X X
Water(2) X X X X
Working from home estimation X X X X X X
(1) Includes offsite electricity for New Zealand and UK.
(2) Includes water use and wastewater (for New Zealand).

Assurance
Our approach to
climate change
The Group has sought assurance from KPMG over a
selection of climate-related measures and disclosures
presented in the 2022 Climate Report. The below summary
outlines the scope of KPMG's assurance, with individual
assurance statements available on NAB's website.
KPMG has provided reasonable assurance over:
• Australian National Greenhouse and Energy Reporting
(NGER) data (Scope 1 and 2 GHG emissions).
Governance
KPMG has provided limited assurance over:
• Specified GHG emissions and offset data relating to NAB
Group.
• Progress reported against NAB Group’s science-based
target to reduce Scope 1 and 2 GHG emissions from
operations by 51% by 30 June 2025, from a 2015 baseline.
• Selected GHG emissions and energy use data prepared
to meet the requirements of the Streamlined Energy &
Strategy
Carbon Reporting (SECR), which are implemented
through the Companies (Directors’ Report) and Limited
Liability Partnerships (Energy and Carbon Report)
Regulations 2018 (UK).
• Renewable energy generation as a proportion (%)
of the Group’s exposure to the power generation
sector, expressed as Exposure at Default (EAD).
management
• Aggregate progress reported against the goal to
undertake $70 billion of environmental financing
Risk
activities by 30 September 2025.
• Financed emissions data, including baselines for NAB's
interim sector decarbonisation targets.
and targets
KPMG's assurance statements available at:
Metrics
https://www.nab.com.au/about-us/social-impact/
shareholders/performance-and-reporting
information
Supporting

Understanding this report Note on forward-looking

statements
This document is not a concise report prepared under This report contains statements that are, or may be deemed
section 314(2) of the Corporations Act 2001 (Cth). NAB has not to be, forward looking statements, including climate-related
prepared a concise report for the 2022 financial year. All goals, targets, pathways and ambitions. These forward looking
figures quoted are in Australian dollars unless otherwise statements may be identified by the use of forward looking
stated. A reference to ‘$’ is to an amount in Australian dollars. terminology, including the terms "believe", "estimate", "plan",
References to "project", "anticipate", "expect", “goal”, “target”, "intend",
‘NAB’ or the ‘Company’ are to National Australia Bank Limited “likely”, "may", "will", “could” or "should" or, in each case, their
ABN 12 004 044 937. The ‘NAB Group’ refers to NAB and its negative or other variations or other similar expressions, or
controlled entities. by discussions of strategy, plans, objectives, targets, goals,
future events or intentions. Indications of, and guidance on,
The Group's financial year ends on 30 September. The
future earnings and financial position and performance are
financial year ended 30 September 2022 is referred to as 2022
also forward looking statements. The NZBA sectoral financed
and other financial years are referred to in a corresponding
emissions reduction targets set out on page 23, the various
manner. References in this document to the year ended
targets relating to operational emissions reduction set out on
September 2022 are references to the twelve months ended
pages 35-36, and the environmental financing target set out
30 September 2022. References in this document to the
on page 34 are all forward looking statements.
environmental reporting year are references to the twelve
months ended 30 June 2022. As at the date of this report (9 November 2022), the
Group considers there to be a reasonable basis for making
Data for NAB's 'financed emissions' is based on the year from 1
the forward looking statements contained in this report.
July 2020 to 30 June 2021 as this aligns with customers'
However, you are cautioned not to place undue reliance
emissions data availability, reported in alignment with the
on such forward looking statements. The measures and
National Greenhouse and Energy Reporting Scheme Act.
forward looking statements in this report reflect best
Further information on non-financial information boundaries estimates, assumptions and judgements as at the date of the
is available in the 2022 Sustainability Data Pack. Any report. There is a risk that these judgements, estimates or
references to changes (including an increase or decrease) assumptions may subsequently prove to be incorrect.
relate
Such forward looking statements are not guarantees of
to the previous year, unless otherwise stated. Unless
future performance and involve known and unknown risks,
otherwise stated, information in this document is presented
uncertainties and other factors, many of which are beyond
on a cash earnings basis. Cash earnings is a non-IFRS
the control of the Group. This may cause actual results
key financial performance measure used by NAB and the
to differ materially from those expressed or implied in
investment community.
such statements.
There are a number of other important factors that could
cause actual results to differ materially from those projected
in such statements, including (without limitation) a significant
change in the Group’s financial performance or operating
environment; a material change to law or regulation or
changes to regulatory policy or interpretation; and risks and
uncertainties associated with the ongoing impacts of the
COVID-19 pandemic, the conflict between Russia and Ukraine,
the Australian and global economic environment and capital
market conditions.
Forward looking statements may also be made – verbally
and in writing – by the Group’s directors or management in
connection to this document. Such statements are subject to
the same limitations, qualifications and assumptions set out in
this document.
Subject to applicable disclosure requirements, the Group
expressly disclaims any obligation to update or revise
the information, measures, or forward-looking statements
contained in this document, whether to reflect any change in
its expectations regarding those forward- looking statements,
any change in events, conditions or circumstances on which
any statement is based, or otherwise.

Glossary
ABA Exposure at Default (EAD) for use in financed Net zero by 2050
Australian Banking Association. emissions and target setting Net zero emissions’ refers to achieving an
Our approach to
climate change
ANZSIC EAD as used in financed emissions baselines overall balance between greenhouse gas
and for setting sector targets is as emissions produced and greenhouse gas
Australian and New Zealand Standard
per EAD definition, however excludes off- emissions taken out of the atmosphere. NAB's
Industrial Classification.
balance sheet market related EAD, covering approach is informed by the UNEP FI
APLMA derivatives and performance guarantees to Guidelines and pathways to net zero that are
Asia Pacific Loan Market Association. rehabilitate existing thermal coal mining aligned with limiting warming to a maximum of
APRA and oil and gas assets. Australian Energy 1.5 degrees Celsius above pre-industrial
Market Operator (AEMO) bonds have also levels by 2100.
Australian Prudential Regulation Authority. been excluded as they are a requirement to Network for Greening the Financial
BNZ participate in domestic electricity and gas System (NGFS)
Bank of New Zealand Limited, a subsidiary of markets for any entity not regulated by the
A group of authorities willing, on a voluntary
NAB Group. Australian Prudential Regulation Authority.
basis, to exchange experiences, share best
Governance
CCCA Financed emissions practices, contribute to the development of
Collective Commitment to Climate Action. Indirect greenhouse gas emissions environment and climate risk management in
attributable to financial institutions due to the financial sector, and to mobilise
CDP (formerly Carbon Disclosure Project)
their involvement in providing capital or mainstream finance to support the transition
Not-for-profit organisation that runs a global financing to the original emitter. Financed toward a sustainable economy.
disclosure system for investors, companies, emissions are included within Category
cities, states and regions to manage their NZBA
15 'Investments' of the Greenhouse Gas
environmental impacts. It provides a dataset Net Zero Banking Alliance.
Protocol Standard.
of environmental and climate metrics. Operational environmental measures
Financial year
Climate Vulnerability Assessment (CVA) Refers to environmental-related
Year ended 30 September.
The Climate Vulnerability Assessment (CVA), a performance measures within NAB's
Council of Financial Regulators (CFR) initiative Full-time equivalent employees (FTE) operational control. This includes Scope 1,
Strategy
led by APRA, was an exercise adopting Includes all full-time, part-time, temporary, Scope 2, and
scenario analysis to assess the nature and fixed term and casual employee equivalents, selected Scope 3 emissions (excluding
extent of the financial risks that large banks in as well as agency temporary employees and financed emissions). It also includes broader
Australia may face due to climate change. external contractors either self-employed operational environmental measures such as
or employed by a third-party agency. Note: waste generation, water usage and energy
Climate-related opportunities
This excludes consultants, IT professional consumption.
Refers to the potential positive impacts services, outsourced service providers and
related to climate change on an organisation. Paris agreement
non-executive directors.
Efforts to mitigate and adapt to climate Refers to the agreement adopted within
change can produce opportunities for Gentailers the United Nations Framework Convention on
organisations, such as through resource Vertically integrated power companies Climate Change in December 2015 and
management
efficiency and cost savings, the adoption and operating in the National Electricity Market, entered into force in November 2016. The
utilisation of low-emission energy sources, where generators own and operate a agreement commits all participating
the development of new products and retail arm. countries to limit global warming to well-
Risk
services, and building resilience along the Greenhouse gas (GHG) emissions below 2°C, striving for 1.5°C above pre-
supply chain. Climate-related opportunities industrial levels, to build resilience to adapt
Gaseous pollutants released into the
will vary depending on the region, market and to impacts of climate change, and regularly
atmosphere that amplify the greenhouse
industry in which an organisation operates. increase efforts over time.
effect. Gases responsible include
Climate-related risks carbon dioxide, methane, nitrous oxide, Paris Agreement Capital Transition
Refers to the potential negative impacts of hydrofluorocarbons, perfluorocarbons, and Assessment (PACTA)
climate change on an organisation. Physical sulphur hexafluoride. Building off a vast climate-related financial
risks emanating from climate change can Greenhouse Gas Protocol database, the PACTA tool aggregates global
and targets
be event-driven (acute) such as increased forward-looking asset-level data (such as
Comprehensive global standardised
severity of extreme weather events (e.g. the production plans of a manufacturing
Metrics
frameworks to measure and manage GHG
cyclones, droughts, floods, and fires). They plant over the next five years), up to parent
emissions from private and public sector
can also relate to longer-term shifts company level. The tool then produces
operations, value chains and mitigation
(chronic) in precipitation and temperature a customized, confidential output report,
actions. The GHG Protocol supplies the world’s
and increased variability in weather patterns which allows investors to assess the
most widely used GHG accounting standards.
(e.g. sea level rise). Climate-related risks can overall alignment of their portfolios with
also be associated with the transition to Group various climate scenarios and with the
a lower-carbon global economy, the most NAB and its controlled entities. Paris Agreement.
common of which relate to policy and ICMA PCAF
legal actions, technology changes, market Partnership for Carbon Accounting Financials.
International Capital Market Association.
responses and reputational considerations.
information
Supporting
IEA Scope 1
CO2-e
International Energy Agency. This includes direct emissions from within an
Carbon dioxide equivalent (CO2-e) is a organisation’s boundary. These emissions
measurement used to compare emissions IEA NZE 2050
are from sources that the organisation owns
from various greenhouse gases based on Refers to the International Energy Agency's or controls such as:
their global warming potential. Other gas Net Zero by 2050 scenario and report
amounts are converted into the equivalent published May 2021. • Combustion of fuel in boilers, furnace or
amount of carbon dioxide to provide a single Interim sector decarbonisation targets generators that are owned or controlled
emissions metric. Conversion factors vary by the reporting company.
based on the underlying assumptions. Refers to targets set at intervals towards
over-arching net zero by 2050 targets. NAB's • Generation of electricity, steam or heat in
Environmental year first tranche of interim targets are set for equipment that is owned or controlled by
Year ended 30 June, in alignment 2030. Also referred to as 'sector targets'. the reporting company.
with relevant environmental regulatory • Business travel in vehicles such as
LMA
reporting requirements. company cars or corporate jets that are
Loan Market Association. owned or controlled by the reporting
Exposure at Default (EAD)
LSTA company, colleague commuting in
EAD represents the expected exposure at company-owned or controlled vehicles,
default, taking into account the repayment of Loan Syndications and Trading Association.
such as company cars.
principal and interest from the balance sheet NAB
• Hydrofluorocarbon emissions from
date to the default event together with any ‘NAB’ or the ‘Company’ means National
company-owned or controlled
expected drawdown of a facility. Australia Bank Limited ABN 12 004 044 937.
refrigeration or air-conditioning
NatHERS equipment.
Nationwide House Energy Rating Scheme is
administered by the Australian Government Scope 2
and accredits a number of tools that can Indirect emissions from electricity that is used
measure and rate a home’s energy by the organisation but is generated outside
efficiency. the organisation’s boundary by another
company, such as an electricity provider.
Natural capital This is called ‘purchased electricity’. This
The stock of renewable and non-renewable includes indirect emissions from purchased or
natural resources (e.g., plants, animals, air, acquired electricity, steam, heat or cooling.
water, soils, minerals) that combine to yield a
flow of benefits to people.
Glossary (cont.)
Scope 3
All other indirect emissions that occur outside
the boundary of the organisation as a result
of the activities of the organisation including
indirect emissions from:
• Business travel in non-company owned
or controlled vehicles, such as
rental cars, colleague cars, rail and
commercial planes.
• Combustion of fuel in boilers or
furnaces not owned or controlled by the
reporting company.
• Colleagues commuting in vehicles not
owned or controlled by the reporting
company, such as light rail, rail, buses and
colleagues’ cars.
• Energy used by colleagues working
from home.
• Third-party production or manufacture
of materials and resources used by the
reporting company, such as furniture,
paper and equipment.
• Indirect losses resulting from the
transmission of electricity and other fuels.
• Emissions generated through the
investments a company makes, see
definition for 'Financed emissions'.
SME
Small and medium-sized enterprises.
Soil organic carbon
Soil organic carbon refers to the carbon
components of soil organic matter.
Streamlined Energy and Carbon Reporting
(SECR)
Reporting of emissions sources required
under the United Kingdom's Companies
(Directors’ Report) and Limited Liability
Partnerships (Energy and Carbon Report)
Regulations 2018.
TCFD
The Financial Stability Board Task Force on
Climate-related Financial Disclosures.
Thermal coal
Coal that is almost exclusively used as a
fuel for steam-electric power generation.
UN SDGs
United Nations Sustainable
Development Goals.
UNEP FI
United Nations Environment Programme
Finance Initiative.
UNEP FI Guidelines
UNEP FI Guidelines for Climate Target
Setting for Banks.
Verra
Organisation that manages the Verified
Carbon Standard program which allows
certified projects to turn their greenhouse
gas (GHG) emission reductions and
removals into tradable carbon credits.

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2022 Climate Report

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2022 Climate Report

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Acknowledgement of Country

Sustainability and NAB's Performance Framework 4

Metrics and targets 19

Reducing financed emissions 21

Environmental financing target 34

Reducing operational emissions 35

2022 Climate Report 1

Supporting customers Investing in Reducing Reducing

(1) Refer to page 34 'Environmental financing target' for further detail.

2 National Australia Bank

2022 Climate Report 3

The Board development program included sessions on Sustainability and NAB's

4 National Australia Bank

Figure 2: NAB's climate strategy priorities

2022 Climate Report 5

Supporting customers to decarbonise and build resilience

Figure 3: Transition maturity of 86 assessed customers, by sector

6 National Australia Bank

Leadership in sustainable financing Business and Private Bank (B&PB)

2022 Climate Report 7

Personal Bank Bank of New Zealand

NAB Green Bond issuance

(1) Data sourced from https://www.dcceew.gov.au/climate-change/publications/national-greenhouse-accounts-2020

8 National Australia Bank

Investing in climate capabilities

Risk Awareness training

(2) BNZ's reporting will be made available at https://www.bnz.co.nz/about-us/sustainability

2022 Climate Report 9

Investing in partnerships, research

• NAB’s work to support the ABA's development of the

Investing in risk management

10 National Australia Bank

Reducing financed emissions

Reducing operational emissions

2022 Climate Report 11

The Group has integrated management of risks

Risk management processes

ESG risk management oversight

12 National Australia Bank

• Re-pricing of assets or increased market

2022 Climate Report 13

ESG risk and policy settings

Oil and gas

14 National Australia Bank

Table 2: Summary of climate scenario models used by NAB in 2022(1)

The Delayed Transition scenario

2022 Climate Report 15

Portfolio and customer-level climate-related Figure 6: Summary of NGFS Scenarios

16 National Australia Bank

2022 Climate Report 17

Participation in industry climate

18 National Australia Bank

Portfolio Environmental Operational emissions Sourcing renewable

Net $70bn 51% 100%

– Coal-fired power generation has reduced to zero within • Supporting customers

2022 Climate Report 19

Understanding financed emissions

2022 is the third year that the Group has completed an

• Aligning the financed emissions baselines with the 10