Our big backyard is incredible—home to some of the most diverse plants and animals in the world. But we are destroying it at an incredible rate. In Queensland alone, between 2018-2020, over 1 million hectares of forest and woodland was bulldozed, mainly for beef production. And in a new report, we reveal behind the deforestation are some of our biggest banks—NAB, Rabobank and CommBank.
Aerial shot of Queensland land clearing Photo: Dean Sewell
Queensland's deforestation front
Australia has the only deforestation front in a developed country anywhere in the world, a huge portion of this being in Queensland. And as home to iconic and endangered species like the koala and the greater glider, the consequences of the destruction are immense. Every hectare destroyed was precious habitat for any number of animals—and it’s pushing many of them to the brink of extinction.
The Banking on Nature Destruction report reveals that of the million hectares of nature that was destroyed over two years, more than a third of the destroyed area met the strictest international definition of deforestation and also likely had a significant impact on a protected species or ecosystem without an approval, and so was potentially illegal.
The homes of koalas were destroyed through the 2018-20 deforestation. Photo: Beverley van Praagh
Almost 200,000 hectares of the deforestation was habitat for the endangered koala; the species most impacted by this destruction. Greater gliders, northern quolls, ornamental snakes and Australian painted snipes also saw tens of thousands of hectares of their forest habitat destroyed. Overall, 227 threatened species and ecological communities saw some of their forest habitat destroyed.
The role of banks in financing deforestation
This deforestation, that contributes to the decline of the population of some of our most-loved species, changes ecosystems, causes erosion, and drives climate change doesn’t happen by itself. Behind Queensland’s nature destruction are Australia’s biggest banks.
As lenders that finance activities across the entire economy – whether it’s building houses, mines, wind farms, or cattle farms –banks have a responsibility to ensure their lending is helping to halt and reverse nature destruction in line with global nature goals.
Every dollar traded in the economy relies on nature being in good health. Half of Australia’s GDP has a moderate to very high direct dependence on nature benefits provided by nature, so ending deforestation is not only good for nature, it makes financial sense to do so.
From the investigation, NAB came out as the bank with the most exposure to high-risk deforestation through its loans. Rabobank was the next most exposed, followed by Commonwealth Bank, ANZ and Suncorp.
The banks with various exposure to potentially illegal deforestation in Queensland.
What should banks do?
By financing businesses involved in deforestation, banks not only fuel the extinction crisis but also expose themselves to substantial risks. But there are plenty of things that can change.
Banks that are truly committed to the global goals for nature need to stop financing deforestation. They need to assess their exposure to nature-related risks, take stock of their nature-related impacts and dependencies, commit to align their lending to global nature goals using science-based targets, including ‘no deforestation’ targets, and implement policies such as conditional lending in order to deliver them.
Despite their pivotal role in financing agriculture and other industries that impact on nature, no Australian bank has committed to stop financing deforestation . Without such a commitment, they cannot claim to have credible net zero policies. Their lack of oversight is driving the extinction crisis and the under-reporting of financed greenhouse gas emissions.
Banks can play a pivotal role in protecting nature, combating climate change, and ending the extinction crisis. The first step is owning up to their role in nature destruction.
