The Australian Conservation Foundation has commended Westpac for becoming the first Australian bank to set a zero-deforestation target for loans to beef, dairy and sheep farming.
Westpac’s natural capital position statement, released today, sets new targets for the bank’s loans to agriculture (defined as dairy, beef and sheep) and includes ‘a commitment to no deforestation, which provides for no further conversion of natural forest to agricultural land use within farm systems from 31 December 2025 for customers in scope of the targets.’
In addition to the zero-deforestation policy, Westpac has today:
“We would expect Westpac’s decision to adopt a zero-deforestation policy for beef, dairy and sheep farming to drive a wave of zero-deforestation commitments across Australia’s banking sector,” said Jonathan Moylan, ACF’s corporate campaigner.
“While global best practice is not to lend to businesses that have engaged in deforestation since the end of 2020, Westpac has given its agricultural customers until the end of 2025 to stop land-clearing, which could lead to panic clearing if adopted across the sector.
“While the scope of Westpac’s commitment could be broader, it should help rein in Australia’s unfortunate status as a global deforestation hotspot by focusing on the main driver of land clearing in Australia: pastoral expansion.
“Each year in Australia, around 500,000 hectares of threatened species habitat is bulldozed, mainly for sheep and cattle grazing – and most of that deforestation is financed by a bank.
“With its climate policy, Westpac needs to be clear about restricting finance to companies that don’t make the deadline for having a 1.5°-aligned transition plan.
“Nevertheless, the restriction of bond finance to companies building new coal, oil and gas projects sends a clear message to the fossil fuel industry that the time for change has arrived.
“Linking executive short-term bonuses to achieving climate targets will focus the board’s mind more on delivering climate outcomes.”