NAB's chairman has defended his bank's underwriting of bonds to fossil fuel companies, arguing the practice doesn't increase its exposure to climate change.
Philip Chronican was responding to a question from Greens activist Jaqueline Marks, who was one of a number of shareholders asking questions about National Australia Bank's commitments to the Paris Accords at the bank's annual general meeting in Sydney on Friday.
Ms Marks said while she welcomed NAB's commitment to stop lending from next October to the majority of upstream fossil fuel customers, she noted the pledge didn't include facilitating bonds or capital market transactions for such customers.
"It's an obvious and massive loophole that as traditional lending is drying up for coal companies, we're seeing an overall pivot to bonds, with coal companies now accessing two and a half more capital through the bond market than traditional loans," Ms Marks said.
Under NAB's plans, the bank could still arrange a bond for Whitehaven Coal, Australia's biggest pure-play coalminer, Ms Marks noted.
"Why is NAB only intending to require climate restriction plans for lending when a coal, oil and gas company could easily get around this restriction by asking a bank to arrange a bond for them," she said.
Mr Chronican said it was even more likely a coal, oil or gas company would go to another bank.
"The question of going down every little rabbit hole is that I don't know where they're going to go - but we are clear in our intent," he said.
"Our intent is to have a portfolio of customers or exposures that is aligned to the Paris goal of one and a half degrees of warming."
Mr Chronican said he wasn't going to "follow every loophole" about what would happen if a gas company came to NAB for a credit card or a bond, adding Ms Marks was "jumping at a shadow" and wasting people's time.
Other shareholders, including two high school students, had questions about the bank's commitments to combating climate change.
"I think it's pretty hard to deny the impact that human activity has had over the last 50 years on C02 levels," Mr Chronican said at one point during the four-hour meeting.
"Climate risk has become very real, as we've seen globally in the last year, with massive heat waves melting the polar ice caps, and the decline of glaciers in New Zealand.
"So, along with the Intergovernmental Panel on Climate Change, we fully understand that the science is pretty solid."
He said NAB had "materially reduced" its funding to fossil fuel companies, prompting a rebuttal from shareholder Hugh Vaughan.
"Materially reduced is not eliminating. You've had $14 billion of funding since 2016," Mr Vaughan said.
"That's completely untrue, so thank you," Mr Chronican replied, arguing NAB's total exposure to fossil fuels was $4 billion.