Australia’s banks are financing deforestation: it’s time to act

Banks have a powerful role to play in either helping or exacerbating Australia's extinction crisis. Banks can either facilitate nature destruction through their lending to certain activities and sectors, or help prevent it by setting strict conditions on lending to those that damage and destroy nature.

Despite growing recognition of the centrality of nature to our prosperity, two of our largest banks - NAB and ANZ - are deeply entangled in one of the most nature-destructive activities in Australia: deforestation.

ACF’s investigations into the issue show that NAB and ANZ have the highest exposure to deforestation among Australian banks. ACF’s 2023 investigation, Banking on Nature Destruction, traced nearly 75,000 ha of deforestation to the two banks over a two-year period. Despite this, neither bank has made a commitment to address the issue or set a timeline for setting a no-deforestation target. Westpac stands alone as the only major bank in Australia with a no-deforestation policy.

With access to their own loan books, NAB and ANZ already know who their customers are. Unlike ACF, which works with a small team and has limited resources to analyse public data and land titles, these banks have the resources and ability to act. Yet while deforestation continues at globally significant rates, progress from the banks has been painfully slow.

Australia is a global deforestation hotspot

The reality is stark. Australia is one of the most biodiverse countries on Earth, home to unique species found nowhere else. Yet we are also a global deforestation hotspot, on par with the Amazon and Borneo.

In Queensland alone, more than 360,000 hectares of threatened species habitat were bulldozed between 2018 and 2020, mostly to clear land for beef production. That’s the equivalent of a football field of forest destroyed every two minutes - a rate that exceeds deforestation for palm oil in Indonesia over the same period.

Since 2000, 83 per cent of Australia’s threatened species have lost habitat. Koalas are among them, with scientists warning the species could face extinction by mid-century unless urgent action is taken to protect and restore their habitat.

The destruction is not only devastating for wildlife. Forests are critical ecosystems - they clean our water, prevent soil erosion, produce oxygen, store carbon, and shield communities from floods and droughts. Removing them undermines the resilience of our landscapes and the stability of our climate.

Why banks must step up

This should matter to banks because our economy is fundamentally dependent on nature. From agriculture to mining to construction, nature’s ecosystems provide the essential resources and stability that underpin our economies and long-term prosperity.

When banks finance deforestation, they are not just destroying habitat and driving species towards extinction. They are also exposing themselves, their shareholders, and the broader economy to escalating environmental and financial risks.

Through addressing their exposure to deforestation and making finance conditional on sustainable practices, banks have the power to shift entire industries. Strong policies and transparent disclosure are essential if Australia is to protect its natural assets and future prosperity.

So what is ACF doing about it?

ACF has engaged with banks for years, sharing evidence of the risks deforestation poses to nature, the economy and the banks themselves. We’ve pointed to international frameworks, provided tools and analysis, and highlighted how weak laws leave banks dangerously exposed. Yet despite years of dialogue, neither NAB nor ANZ has taken sufficient steps to reduce their deforestation risk or commit to no-deforestation targets.

That’s why ACF is filing Australia’s first-ever nature-related shareholder resolutions for banks. We are calling on NAB and ANZ to disclose their exposure to deforestation and to adopt strong no-deforestation policies.

Shareholder resolutions are powerful tools to influence company decision-making. They place the issue as a formal item for discussion at the company’s Annual General Meeting (AGM) and create opportunities where corporate decision-makers must respond.

By joining the campaign as a supporting shareholder, you can help build shareholder power and get ANZ and NAB listening. Once we reach 100 shareholders, we unlock the right to lodge a resolution at the banks’ AGMs.

The evidence is clear. The destruction is happening. The risks are mounting. NAB and ANZ have no excuse not to act.

If you’re a shareholder in NAB or ANZ, you can join the shareholder resolution here.