NAB flags mortgage discounts on loans for homes that cut emissions

The NAB chief executive Ross McEwan has flagged home loan interest rates being discounted for borrowers doing their part to reduce household emissions.

The National Australia Bank has backed a new tool to help lenders across the world meet tougher environmental reporting standards.

NAB have gone to Adelaide-based start-up ValAi for a home sustainability rating tool, known as Greenhouse.

Property accounts for 23 per cent of Australia’s emissions and residential property accounts for half of the tally with the main source of residential emissions being heating and cooling, which account for 40 per cent, followed by appliances at 25 per cent and water heating at 23 per cent.

"Residential mortgages are a huge proportion of National Australia Bank (NAB)’s book – roughly 50 per cent of the bank’s balance sheet," David Jenkins Head of Sustainable Finance at NAB told a Green Energy Finance Corporation panel discussion recently.

"The average house emits around seven tonnes of greenhouse gases per year, and if you extrapolate this over our book it is immense.

"If we can reduce this by a sizeable amount it will have a marked impact," he said.

"Borrowers want to see a green-mortgage product because it makes sense for them and they want to play a part in the low-carbon transition," Jenkins noted. “If [customers] put themselves in a better position, then we should recognise that,” McEwan told The Australian Financial Review earlier this month.