The ongoing acceleration of Australia’s nature destruction will be felt everywhere — from the air we breathe, to the food we eat and the water we drink. From our backyards to our favourite holiday spots. And even our bank accounts and retirement savings.

We all love Australia’s unique landscapes and animals, but what a lot of us don’t know is half of Australia’s GDP has a high or very direct dependence on nature.

That means our savings, held by banks and superannuation funds with exposure to industries reliant on nature, are also at risk from nature destruction.

Australia’s major industries — like agriculture, forestry, fisheries, food manufacturing, construction and resources — are the most heavily dependent on nature, and also have a heavy impact on nature. They are also industries Australia’s ‘big four’ banks have a massive exposure to $173 billion credit in total to agriculture, forestry, fishing and mining alone.

In a new report, Risky business: How Australia’s banks and super funds are responding to the nature crisis, ACF reveals how prepared banks and super funds are to measure, manage and mitigate the risks arising from the impacts and dependencies on nature that are present in their portfolios and loan books. We also reveal the meagre actions they are taking to protect the planet we love.

Who's contributing to nature destruction?

The financial sector bears particular responsibility for reversing the nature crisis because it decides which activities in the economy are financed or insured and under what conditions. Whether it’s a business destroying wildlife habitat for more cattle grazing in Queensland or a property developer cutting down trees for more suburban sprawl, there’s almost always a financial institution bankrolling the activity.

Not only is nature destruction a financial risk, most of us don’t want to be unwittingly financing the demise of the Great Barrier Reef or the extinction of koalas through our bank accounts and super contributions.

Are banks and super funds responding to the nature crisis?

Our survey of 20 banks and super funds shows that while the institutions know nature destruction is a risk to them and are feeling pressure from the community and investors to consider nature in their business activities, very few have taken concrete action to do so.

The majority are taking a back seat when it comes to engaging in measuring their impacts and dependencies on nature, and assessing the risks and opportunities associated with nature. Most troubling of all, few have set targets for nature.

This means that not only are they highly exposed to risks associated with the continued degradation of the ecosystem services they depend on, they’re also funding the drivers of extinction—bad news for koalas, customers, shareholders, and the stability of the Australian economy.

Which bank CAN?

Many banks and super funds have climate targets and policies, including targets to achieve net zero. But with the nature and climate crises inextricably linked, no climate policy can claim to stand up if it doesn’t address deforestation and biodiversity loss.

Out of the 20 banks and super funds surveyed, we found just three — Future Super, Australian Super and NAB — that have assessed nature-related risks and opportunities. Only 40% plan to do so in the future.

None of the big four banks has a ‘no deforestation’ policy, which means they are likely contributing to Australia being the only developed economy with a deforestation front, just like the Amazon and the Congo. It also means ANZ, CBA, NAB, and Westpac’s net zero commitments lack integrity.

Australian Ethical is the only super fund with a deforestation and land conversion policy, while four banks: Bank Australia, HSBC, Rabobank and Bendigo & Adelaide Bank also have one.

No bank or super fund surveyed has a policy on biodiversity offsets and just half have a carbon offset policy.

Without adequate assessments and planning to address the risks, Australian banks and super funds will be left behind and jeopardise billions of dollars of investments. Our dependence on nature in our major industries is so high, experts have warned we will be one of the worst affected countries in the world from climate change and nature loss. If unaddressed, by 2050 our economy could be losing US$20 billion per year in GDP.

What should banks be doing?

The evidence is clear that our economy depends on nature. What’s even clearer is that the nature crisis is putting the planet at risk — it threatens our health, the climate and the places we love.

By now Australian banks and super funds should already have:

  • Conducted a high-level assessment to understand how their loans and investments might be impacting, or impacted by, the nature crisis
  • Set a target of no deforestation across their loans and investments
  • Integrated nature into their climate targets and policies
  • Have a plan for when they will complete comprehensive impact and dependency reporting, and nature target-setting
  • Begun engaging with clients, customers, and other stakeholders on their approach to nature
  • And be advocating for stronger nature laws, including nature related financial regulations, and more funding to protect and restore nature

How is your bank or super fund responding to the nature crisis? Take a look at the full report for more info. You can also get in touch with your bank, demanding they step up their commitments!

Nathaniel Pelle

Business and Biodiversity Campaign Lead