Call for ‘no deforestation’ conditions on bank loans

Banks are starting to look at the problem of funding nature destruction but must put stricter conditions on loans to agriculture enterprises and property developers, environmentalists say.

A report released on World Environment Day suggests most agribusinesses that unlawfully clear wildlife habitats in Queensland are financed by an Australian bank, via a mortgage or other security.

The analysis by the Australian Conservation Foundation found about one-quarter of the properties had a security held by National Australia Bank.

The other main lenders were Rabobank, Commonwealth Bank, ANZ, Suncorp and Westpac.

“Banks should do due diligence before lending, set ‘no deforestation’ targets and attach relevant conditions to their loans to agribusinesses and property developers,” ACF campaigner Nathaniel Pelle said.

He said by lending without any conditions on deforestation, banks are effectively financing the destruction of habitats for threatened species such as the koala, which has had 200,000 hectares of habitat destroyed in the past 10 years.

Potentially illegal deforestation occurred on 4442 properties, according to the report.

More than 364,000 hectares of native vegetation cleared in Queensland from 2018 to 2020 had a significant impact on a listed threatened species or ecological community – and was done without federal approval, making it possibly illegal, ACF found.

More than half of the clearing took place on 267 properties (241 owners), meaning a small number of pastoral businesses are responsible for most of ongoing habitat destruction, ACF said.

The United Nations says companies cannot claim to be on the path to net zero while still funding deforestation.

UN Secretary-General Antonio Guterres last year declared “zero tolerance for net-zero greenwashing” with work under way to develop stronger and clearer standards for net-zero emissions pledges by businesses.

None of Australia’s big four banks have a ‘no deforestation’ target, raising doubts about the credibility of their net zero commitments, Mr Pelle said.