As Treasurer Jim Chalmers flags climate risk disclosure rules for financial institutions, new analysis shows not one of Australia’s major banks or superannuation funds has properly assessed the damage their investments and financing decisions are doing to nature, or set targets to reverse that damage.
Risky business, the first benchmarking analysis of 20 of Australia’s largest banks and super funds’ approach to managing nature-related risks, shows:
“Whether it’s a business destroying wildlife habitat for more cattle grazing in Queensland, or a property developer knocking over trees for more suburban sprawl, there’s almost always a financial institution bankrolling the activity,” said ACF’s Business and Nature campaigner Nathaniel Pelle.
“The financial sector bears particular responsibility for reversing the nature crisis because it decides which activities are financed or insured and under what conditions.
“Our analysis shows banks and super funds are largely unprepared to mitigate the risks – or seize the new opportunities – associated with their dependence and impacts on nature.
“Australia is facing an extinction crisis, while recent ACF research showed roughly half Australia’s GDP is directly dependent on nature.
“Banks and super funds need to assess, disclose and reduce their exposure to nature-related risks and most importantly set targets and policies that will shift investment away from practices that destroy nature toward activities that restore it.
“Australians want to know that they are not unwittingly financing the extinction of animals like the koala, or the collapse of rainforests, through their savings.”
ACF’s assessment comes as countries prepare to vote on a global target that would require all large businesses and financial institutions to report on the impacts and dependencies their supply chains and portfolios have on nature at COP15, underway in Montreal.
The Taskforce on Nature-related Financial Disclosures (TNFD) will finalise its guidance on nature related risk reporting and target-setting in September 2023 with some markets, like the EU, already indicating nature related disclosures will become mandatory.
Risky business: How Australia’s banks and super funds are responding to the nature crisis