The National Farming Federation responded to the report by questioning the legitimacy of land cleared using offsets. Agforce, a prominent farming organization in Queensland, described the report as deceptive and emphasized that the state had robust regulations regarding vegetation management.
According to Sinclair from the ACF, Australia is deemed a “global deforestation hotspot,” and investigations conducted by the ACF have previously uncovered ongoing habitat destruction that threatens various species, including koalas and pink cockatoos.
Financing clients who depend on deforestation is “not good business” for any bank.
He further stated, “Banks supporting deforestation not only harm habitats and push species toward extinction but also put themselves, their investors, and the wider economy at increasing environmental and financial peril.”
A representative from NAB reported that the bank is taking action regarding the recommendations outlined in the ACF’s deforestation report, and it is continuously updating its stance on “deforestation risk.”
“As the leading lender to the agriculture sector in Australia, we recognize that deforestation is a complicated issue that requires collaboration among government, industry, and landowners,” stated the NAB spokesperson.
Updates made by NAB consist of revising land valuation processes and investing in “geospatial tools to enhance understanding of land usage changes and their associated risks,” the spokesperson added.
Amanda Richman, ethical stewardship leader at Australian Ethical, remarked that supporting clients who rely on deforestation is “not good business” for any bank, as these clients face greater risks associated with soil degradation and diminished long-term agricultural viability.
Moreover, she highlighted that deforestation connects to NAB’s climate change objectives, as the bank aims for “net zero” in its financed and facilitated emissions by 2050. Forests play a crucial role in absorbing carbon dioxide, and their removal releases carbon back into the atmosphere.
<p“As responsible investors dedicated to promoting positive change, we have been engaging with NAB to secure a commitment towards ceasing the financing of deforestation,” Richman noted.
ANZ Bank has established a land and forest management policy that was reviewed and enhanced last year.
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In late 2023, Westpac became the first major Australian bank to pledge towards zero deforestation by 2026. At the announcement, Westpac executive Anthony Miller, who later became CEO, clarified that the policy pertains only to “natural forests” and does not extend to regrowth clearing or areas currently utilized for grazing. “We are not instructing farmers against clearing their land,” Miller mentioned at that time.
Historically, banks have been subjected to various resolutions urging lenders to reduce funding for significant carbon emitters; however, this marks the inaugural resolution for an Australian bank focused on “nature risk”—the potential risks stemming from a company’s environmental impact or reliance on natural resources.
This year, supermarket leaders Coles and Woolworths are facing shareholder proposals regarding the environmental repercussions of farmed seafood, particularly related to the contentious salmon farming sector in Tasmania. Last year, both companies encountered similar proposals that did not succeed despite gaining some shareholder backing.
