Highlights

• ACF report discovers that NAB has the highest exposure to deforestation.
• More than 100 shareholders back a resolution clamouring for more disclosure on deforestation risks.
• Investigations unravel dozens of land-clearing cases linked to NAB mortgages between 2023 and 2024.

National Australia Bank (NAB) is under growing scrutiny from investors after an investigation by the Australian Conservation Foundation (ACF) linked its agricultural lending to widespread deforestation.

More than 100 shareholders, organised by ACF, have backed a resolution that will be presented at NAB’s annual general meeting on 12 December. This will be the first time a major Australian bank faces a shareholder proposal at its AGM on nature-related risk disclosures.

The resolution has been co-filed by institutional investors such as Melior Investment Management, SIX Invest, and Australian Ethical and asks NAB to disclose the extent of its lending to agribusinesses connected with deforestation and develop a strategy that aligns with global environmental standards.

Read More: EU Deforestation Law Faces Embarrassing Delay Over Technical Failures

Ethical investment groups say funding businesses that rely on land clearing carries financial dangers. These dangers include soil degradation, reduced long-term productivity, and loss of access to markets that enforce strict environmental rules.

The pressure follows the release of ACF’s ‘Financed Deforestation’ report, which examined the role of major banks in agricultural land clearing.

According to the report, NAB had the highest exposure to deforestation among Australian banks.

Using satellite imagery, drone footage and property title data, ACF identified 100 land clearing incidents between July 2023 and July 2024. Of these, 34 were tied to NAB mortgages, which was twice as many as any other bank. In nine instances, land was cleared during or shortly after mortgage agreements were finalised.

The investigation found 42 cases that likely affected Matters of National Environmental Significance without federal approval, which raises concerns about breaches of the Environment Protection and Biodiversity Conservation (EPBC) Act.

One example is a property mortgaged by NAB that cleared 366 hectares of land between August 2022 and August 2024 in the Murray Darling Depression bioregion of southwest New South Wales. This location falls within the Southern NSW Mallee Key Biodiversity Area, which has global ecological importance.

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The cleared land likely included habitat for the Mallee Bird Ecological Community and threatened species such as Corben’s Long-eared bat, south-eastern hooded robin, southern whiteface, pink cockatoos, and malleefowl.

Other banks were also named in the report. ANZ (including Suncorp Bank) had the second highest number of mortgages connected with deforestation, while Rabobank, Commonwealth Bank, and Westpac shared third place.

ACF said that banks have been underreporting financed emissions, as many exclude land-use change emissions, which make up a major portion of carbon dioxide output. The report also stated that more forest was cleared for beef in Queensland in recent years than the total cleared for palm oil in Indonesia during the same period.

ACF’s recommendations included the creation of no-deforestation lending policies, increased geospatial monitoring, improved engagement with farmers on regenerative agricultural practices, and stronger federal environmental law reforms.

In response, NAB said deforestation is a complex problem that needs cooperation between governments, industry groups, and landholders.

The bank said it is already acting on several ACF recommendations by updating land valuation processes and investing in geospatial technology to track land-use changes and related risks.

NAB’s 2024 annual report also mentioned internal reviews and actions when illegal land clearing is detected among customers. The bank is due to release more information on its approach in its climate report on 6 November.

See Also: When Will Corporations Take Deforestation Seriously?

Agri-lending means financial services and loans provided to agricultural businesses. These loans are taken against farmland and are used for purposes such as livestock purchases, equipment upgrades, farm expansion, or seasonal cash flow management.

The resolution filed by shareholders is being lodged ahead of the December AGM.

Ends/

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Source: MPA