National Australia Bank Ltd

The NAB Board retains ultimate oversight for ESG-related matters, including strategy and risk management, supported by the Board Risk & Compliance Committee (BRCC). This includes considering issues associated with climate change, biodiversity, water, forests and a range of other topics as relevant. BRCC has accountability for oversight of NAB Group's risk profile and risk management, which includes Sustainability or ESG-related risk, within the context of Board determined risk appetite (although ultimate responsibility for risk oversight, risk appetite and risk management rests with the Board). The BRCC refers all matters of significant importance to the Board, making recommendations to the Board concerning the Group's current and future risk appetite, risk management strategy and particular risks or risk management practices, including those related to ESG matters like climate change, and a range of other environmental topics as relevant, such as biodiversity, water and forests. For example, information on the impacts of drought on credit risk. [...] The Board and BRCC receive reports on a range of ESG-related issues, strategy and commitments, risks and opportunities and related regulatory change and reporting returns. For example, the Board receive regular updates on operational environmental performance targets associated with mitigating water-related operational risk, this includes a target for office-based water consumption. This, and other operational environmental targets also ensure NAB Group reduces GHG emissions associated with water use.

The NAB Board retains ultimate oversight for ESG-related matters, including strategy and risk management, supported by the Board Risk & Compliance Committee (BRCC). This includes considering issues associated with climate change, and a range of other environmental topics as relevant, such as biodiversity, water, and forests. BRCC has accountability for oversight of NAB Group's risk profile and risk management, which includes Sustainability or ESG-related risk, within the context of Board determined risk appetite (although ultimate responsibility for risk oversight, risk appetite and risk management rests with the Board). The BRCC refers all matters of significant importance to the Board, making recommendations to the Board concerning the Group's current and future risk appetite, risk management strategy and particular risks or risk management practices, including those related to ESG matters like climate change, biodiversity, water and forests, where relevant and material. [...] The Board and/or BRCC receive reports on a range of ESG-related issues, strategy and commitments, risks and opportunities and related regulatory change and reporting returns.

The Board oversees sustainability-related risks and opportunities, including climate and nature- related risks. [...] The Board retains oversight of environmental, social and governance (ESG)-related matters including climate change. ESG considerations are integrated into business strategy, operations and risk management. [...] The Board is supported by the Board Risk & Compliance Committee (BRCC) which has accountability for oversight of the Group's risk profile and risk management. This includes climate risk, within the context of Board determined risk appetite, although ultimate responsibility for risk oversight, risk appetite and risk management rests with the Board. [...] The BRCC refers all matters of significant importance to the Board, making recommendations to the Board concerning the Group's current and future risk appetite, risk management strategy and particular risks or risk management practices, including those related to climate change. [...] The Board and BRCC regularly (at least quarterly) receive reports on climate-related matters which may include strategy, goals and targets, risks and opportunities, ESG-related credit policy and appetite settings, environmental operational performance, scenario analysis and stress testing, climate-related regulatory change and reporting submissions and concerns raised by stakeholders. [...] Members of the Executive Leadership Team (ELT) have a key role driving the implementation of the Group's climate strategy and in assessing climate-related risks and opportunities. The ELT consider (and endorse to Board) matters relevant to the Group's climate strategy and key climate-related goals and targets. This includes relevant targets required due to the Group's participation in the NZBA. [...] The Group Executive, Strategy & Innovation is accountable for the design and execution of the Group's strategic climate ambition. In 2022, the Group created a Chief Climate Officer role (recruitment under way) to report to this Group Executive and drive this work. [...] The Group Chief Risk Officer (GCRO) is accountable for integration and management of climate risk within the Group's Risk Management Framework and practices. [...] The Group Chief Operating Officer (GCOO) is Chair of the Sustainability Council, which is responsible for aligning activity across the Group and overseeing progress against the Group's broader sustainability goals and targets. The GCOO provides updates on the Group's sustainability performance to the Board. [...] 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.

**3. Engage responsibly on climate policy**

NAB will continue to engage in dialogue with key stakeholders, including customers and the wider community, to help inform how we advocate on climate policy with all levels of government. NAB will ensure that our engagement on climate policy is co-ordinated and consistent and we will communicate our position, actions and outcomes annually through NAB's CDP climate change survey response and annual report suite of documents.

We recognise the role of industry associations in contributing to public policy debate and advocacy on issues of importance to our business, customers, shareholders and the community.Â

The diverse membership of some industry associations means there will be a diversity of opinion on particular issues. We may not always share the public views of individual members of an association, or an association as a whole.

However, by maintaining membership in our industry associations, we can share knowledge, data, and encourage policy advocacy and actions broadly aligned with our own views - including on climate change and the environment. Membership also allows us to advocate within the association for a change in policy and actions to be more aligned with our own views and approach.Â

When an industry association's position on an issue varies significantly from our public position, we raise this directly with the leadership of that association, and take this into account at the time of membership renewal.

Key examples in 2021 include engaging with industry associations and contributing to government consultations on topics such as climate, biodiversity, energy policy, modern slavery and other sustainability issues both through industry associations and directly. [...] NAB has established a Sustainability Council, chaired by the Chief Operating Officer, to drive execution of the long-term pillar of our Group Strategy, including meeting our obligations under the PRB. [...] PRB obligations have been formally assigned in our risk management system and Sustainability Risk is now a material risk category in our Risk Management Framework.

* ### Engaging responsibly on climate policy

We continue to engage in dialogue with key stakeholders, including customers and the wider community, to help inform how we advocate on climate policy with all levels of government. We also strive to ensure our engagement on climate policy continues to be co-ordinated and consistent. We communicate our position, and outcomes annually through our CDP climate change survey response (PDF, 907KB) and annual reporting suite of documents.

#### Environmental engagement and advocacy

2.6.1 The Group must undertake engagement with relevant stakeholders (this may include government, investors, and non-government organisations etc) to further its understanding of its direct and indirect environmental impacts and contribute to consultation processes related to relevant public policy and regulation.

2.6.2 Where a material environmental risk is identified, Environmental, Social & Governance Risk Management (ESG Risk Management), material risk teams, Divisions and Group Members are expected to proactively engage with relevant stakeholders[4], to understand the issue or risk and identify actions to reduce or mitigate risk NAB's risk exposure. Any such engagement involving government and non-government organisations must be in consultation with Corporate Affairs and in accordance with relevant Group frameworks, policies and practices, including the Stakeholder Advocacy and Action Management Standard Operating Procedure.

4 This may include customers, suppliers, government, non-government organisations and local communities.

The Board Risk & Compliance Committee oversees ESG risks (including climate and human rights-related risks) Strategy, and the Group's environmental compliance and performance reported and escalated by management. [...] The Board receives reports on climate-related matters which may include strategy, goals and targets, risks and opportunities, ESG-related policies and risk appetite settings, environmental operational performance, scenario analysis and stress testing, climate-related regulatory change and reporting submissions and concerns raised by stakeholders. [...] The Board is supported by the BAC, which provides an objective, non-executive review and oversight of the effectiveness of the Group's financial and external reporting (including climate reporting). [...] BAC is responsible for oversight of the financial statements and for reviewing the adequacy of the financial and external reporting processes of the Group. As part of its oversight role, BAC reviews reports on how management satisfies itself that climate reports provide stakeholders with appropriate information to make informed decisions about the Group's performance and position related to climate-related matters. [...] The Board is supported by the Board People & Remuneration Committee in discharging its responsibilities relating to people and remuneration strategies, policies and practices of the Group, including sustainability-related risk and performance measures. In undertaking these activities, the Committee monitors how remuneration and performance frameworks are applied across the Group, particularly ensuring effective connections between risk management and remuneration outcomes. [...] Ultimate accountability for risk oversight, risk appetite and risk management rests with the Board. The Board is supported by the BRCC which has responsibility for oversight of the Group's risk profile and risk management. This includes ESG risk, within the context of Board determined risk appetite. [...] The BRCC refers all matters of significant importance to the Board, making recommendations to the Board concerning the Group's current and future risk appetite, risk management strategy and particular risks or risk management practices, including those related to climate change.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]NAB is committed to engaging responsibly in climate change policy development. This continues our longstanding approach to constructively engage in the policy development process, where it is relevant to our business. NAB has an internal consultative process aimed to ensure that our direct and indirect activities that influence policy are consistent with the climate change area of focus in our Group Strategy and with our climate change strategy, as well as being consistent across business divisions and geographies. Under this process, representatives from relevant business units (such as Specialised Finance, Capital Financing Solutions, Advisory and others) and Group functions such as Risk, Corporate Affairs, Government Affairs and Legal meet together (as appropriate) to review policy changes and determine the relevance and impact of those policy changes, as they relate to NAB Group. Formal approval from relevant internal stakeholders is sought prior to the formal submission on proposed regulatory or policy changes.

NAB also has policy in place requiring approval for participation in external speaking engagements and speaking to media is limited to employees who have approval.

In addition, NAB's Social Impact team regularly reviews the advocacy activities of NAB's industry associations to ensure continued alignment with the Paris Agreement goal.

Attach commitment or position statement(s)[…]On 18 October 2018, NAB released a media release about NAB's role in the transition to a low carbon economy (https://news.nab.com.au/news/the-role-nab-plays-in-the-transition-to-the-low-carbon-economy/ ) which includes how "in addition to supporting our customers through the low-carbon transition, we commit to working actively with our stakeholders – including the industry associations of which NAB is a member – to share our knowledge and data, and advocate for policy and actions that will limit global warming to less than two degrees. We are also committed to ensuring that our industry associations advocate for policy aligned with this goal. To this end, we will continue to review the advocacy activities of those industry associations and commit to relevant disclosure to shareholders. Where we identify a material misalignment, we will take this into consideration when deciding whether to renew our membership."

This position is also affirmed on NAB's website (https://www.nab.com.au/about-us/social-impact/shareholders/memberships-and-recognitions) as well as in annual sustainability reporting.

Does your organization have a public commitment or position statement to conduct your engagement activities in line with the goals of the Paris Agreement?[…]Yes