ANZ BANKING GROUP | Disclosure of a pathway to deforestation-free finance
Status
Filed
AGM date
Resolution details
Company ticker
ANZ.AX
Lead filer
Resolution ask
Report on or disclose
ESG theme
- Environment
ESG sub-theme
- Biodiversity / nature
- Land use inc. deforestation
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Financials
Company HQ country
Australia
Resolved clause
Deforestation linked to bank lending, including potentially illegal cases, poses material risks to the bank and its customers. ANZ has not disclosed any initiatives to reduce risks arising from deforestation impacts, placing it behind domestic and global peers.
Shareholders therefore request that ANZ disclose a pathway to achieve deforestation-free finance in line with credible frameworks such as the Accountability Framework initiative.
Shareholders therefore request that ANZ disclose a pathway to achieve deforestation-free finance in line with credible frameworks such as the Accountability Framework initiative.
Supporting statement
Australian Ethical Investment Ltd is leading a Collaboration on this ESG issue, which you can view at: https://collaborate.unpri.org/group/40771/about
SHAREHOLDER SUPPORT FOR UPLIFT IN DEFORESTATION DISCLOSURE IGNORED
Significant support for these resolutions last year has not resulted in any improvement in disclosure nor a shift in intent from the bank to address deforestation-related risks. The Board has ignored the reasonable request from nearly a quarter of shareholders to have the bank assess its deforestation exposure. The absence of a specific approach to identify illegal or legal deforestation by its customers highlights a weakness in due diligence processes and risk management.
ANZ’s board has a duty under the Corporations Act 2001 (Cth) to carefully consider the bank’s exposure to nature-related risks through its lending. Directors may otherwise be found liable for breaching their duty of care where efforts have not been made to determine the foreseeable risk of harm from nature impacts [1]
Last year the bank said it was ‘seeking to improve [its] understanding of the impacts and dependencies – positive and negative – nature and biodiversity can have on [its] customers’ [2]. Without any substantive disclosure provided to date, it is not clear to shareholders how the bank is carrying this out.
INVESTIGATIONS CONTINUE TO LINK ANZ FINANCE TO DEFORESTATION, INCLUDING POTENTIALLY ILLEGAL CLEARING
Expansion of pasture for livestock has rendered Eastern Australia a global deforestation hotspot [3]. Official data shows that clearing in Queensland was in excess of 270,000 hectares in the last reporting period [4], which was almost nine times more than clearing for the entire Indonesian palm oil sector during the same period [5].
The Australian Conservation Foundation’s (ACF) most recent investigation identified 2,449 hectares of deforestation linked to ANZ finance [6]. The investigation only examined a portion of the deforestation occurring in Australia and ANZ’s actual exposure could be much larger. None of the cases linked to ANZ obtained federal approval despite many of them likely meeting the threshold for impacts on threatened species habitat requiring referral under Australia’s Environment Protection and Biodiversity Conservation (EPBC) Act 1999.
The Responsible Investment Association of Australia’s 2024 survey of bank customers found 83% of customers wanted a commitment from their bank to protect biodiversity [7]. The destruction of habitat for iconic Australian species like the Grey Falcon (the bank uses a falcon animation to market fraud protection), Koala and Pink Cockatoo is clearly misaligned with consumer preferences, creating reputational risk for the bank. This risk is growing as more consumers recognise ANZ’s role in financing deforestation.
DEFORESTATION GIVES RISE TO CREDIT RISKS, CONCENTRATED IN AGRIBUSINESS LENDING
ACF’s investigations have found that ANZ has the second highest cumulative hectares of deforestation linked to any Australian bank with 45,753 hectares. The materiality of ANZ’s deforestation-related risk exposure is not however limited to customers engaging in deforestation - it extends to all sectors that depend on nature, with agriculture among the most dependent [8].
Deforestation leads to reductions in biodiversity, disruption to the water cycle, degraded soil, increased likelihood of physical climate events and carbon emissions. These impacts are reducing the resilience of Australia’s ecosystems and the ecosystem services that agribusiness customers depend on. Soil degradation in Australia is estimated to cost $224 billion annually in lost ecosystem services and production capacity [9].
Combined with lower rainfall, fewer pollinators and pest controllers, deforestation hinders farm profitability and the value of loan collateral. This has credit risk implications for agribusiness lending, to which ANZ’s exposure grew over 20.8% in FY25 to $39.5bn [10].
DEFORESTATION INCREASING THE SEVERITY OF CLIMATE RISKS ACROSS ANZ’S LOAN PORTFOLIO
Deforestation is a climate risk multiplier, increasing the likelihood of drought, while also drastically increasing flood risk in catchment areas by up to 700% [11]. While ANZ has not conducted a physical risk assessment of its agriculture exposure, the bank estimates 2.7% of its consumer lending is currently vulnerable to climate perils [12]. World Bank analysis has found severe disaster episodes have raised non-performing loans by 0.6% in the years following [13]. With a rising insurance protection gap in Australia [14], reducing deforestation is a necessary mitigant to limit future impairments in the consumer and business bank.
Emissions from forest loss, which averaged 55 million tonnes of CO2-e since 2000 [15], are also contributing to increasingly frequent and severe climate events. ACF’s investigations have estimated 2.9 million tonnes of CO2-e from deforestation linked to its finance through its last two investigations. These emissions must be addressed by the companies accountable for them, including ANZ, however the bank has not disclosed how it aims to address these emissions despite producing a climate report since 2017 [16].
TRANSITION RISK FROM ANZ CUSTOMERS FAILING TO IMPLEMENT DEFORESTATION-FREE SUPPLY CHAINS
Major beef buyers in Australia and overseas have committed to no-deforestation, including Coles, Woolworths, McDonalds and Aldi. With regulations arising to meet the commitments made by national governments to the Glasgow Declaration, including Australia and the largest importers of Australian beef, the market for deforestation-free beef will continue to grow.
The bank’s livestock customers that fail to adopt nature-positive practices risk losing access to high value markets, so there is a clear incentive for the bank to identify and support these customers in a pathway to deforestation-free. ANZ has not disclosed any initiatives to this end.
A PATHWAY TO DEFORESTATION-FREE FINANCE IS REQUIRED TO REDUCE RISK
Global peers throughout Asia, South America, the EU and UK are making progress towards their deforestation-free commitments. Forty-one percent of the largest financial institutions globally have set a deforestation-free commitment for one or more commodities.
A pathway to achieve deforestation-free finance allows time for implementation and would reduce physical and transition risk exposure across the bank’s loan portfolio over time. The pathway steps could be aligned with best practice guidance from The Accountability Framework initiative: a credible framework used by companies globally to set and implement deforestation-free commitments [17].
With no steps being disclosed to date, the concern remains that ANZ does not intend to address impacts from deforestation and close the gap to domestic peers Westpac and NAB [18].
References:
[1] https://pollinationgroup.com/wp-content/uploads/2023/11/Joint-Memorandum-of-Opinion-Nature-related-risks-and-directors-duties.pdf
[2] https://www.anz.com.au/content/dam/anzcomau/about-us/anz-2025-climate-report.pdf
[3] https://wwfint.awsassets.panda.org/downloads/deforestation_fronts___drivers_and_responses_in_a_changing_world___full_report_1.pdf
[4] https://www.qld.gov.au/environment/land/management/mapping/statewide-monitoring/slats/slats-reports/2023-24-slats-report
[5] https://news.mongabay.com/2026/05/loopholes-undermine-palm-oil-industrys-antideforestation-pledges/
[6] https://www.acf.org.au/publications/reports
[7] https://cdn.prod.website-files.com/67a17dcc2362afe3723b9c97/6850b48ad3c0cc469be2352e_From-Values-to-Riches-2024_RIAA_compressed.pdf
[8] https://www.acf.org.au/publications/reports
[9] https://www.robertcostanza.com/wp-content/uploads/2017/02/2016_J_Sutton_ELD_LandDegradation.pdf
[10] https://www.anz.com/content/dam/anzcom/shareholder/1H26-results-announcement/1H26-ANZ-Results-presentation-and-IDP.pdf
[11] https://doi.org/10.1038/s43247-025- 02748-6
[12] https://www.anz.com/content/dam/anzcomau/about-us/anz-2025-climate-report.pdf
[13] https://documents1.worldbank.org/curated/en/099614202282325736/pdf/IDU010b823eb0a253042430a92f0c19e5f0c80bc.pdf
[14] https://www.apra.gov.au/news-and-publications/mind-gap-insurance-climate-vulnerability-assessment
[15] https://canopy.acf.org.au/m/1bdee9bee85112cb/original/How-claims-of-a-net-increase-in-forest-cover-mask-the-truth-about-the-environmental-impact-of-land-clearing-in-Australia.pdf?_gl=1*1lbejud*_gcl_au*Mzc1MTE4MjAzLjE3Nzk2ODgyNDY.*_ga*MjEwNTg2NTU4OS4xNzU1ODM4OTg0*_ga_F2SYMWY8QD*czE3ODE3NDQzMTMkbzYyJGcwJHQxNzgxNzQ0MzEzJGo2MCRsMCRoMA..
[16] https://www.anz.com.au/about-us/esg/reporting/
[17] https://forest500.org/wp-content/uploads/2026/06/F500_2026_FinanceReport_FINAL.pdf
[18] https://canopy.acf.org.au/asset/2f9cbd66-126d-4c91-ab10-f5ed47180693/2604_Corporate_GuideOnDeforestation_FINAL.pdf
SHAREHOLDER SUPPORT FOR UPLIFT IN DEFORESTATION DISCLOSURE IGNORED
Significant support for these resolutions last year has not resulted in any improvement in disclosure nor a shift in intent from the bank to address deforestation-related risks. The Board has ignored the reasonable request from nearly a quarter of shareholders to have the bank assess its deforestation exposure. The absence of a specific approach to identify illegal or legal deforestation by its customers highlights a weakness in due diligence processes and risk management.
ANZ’s board has a duty under the Corporations Act 2001 (Cth) to carefully consider the bank’s exposure to nature-related risks through its lending. Directors may otherwise be found liable for breaching their duty of care where efforts have not been made to determine the foreseeable risk of harm from nature impacts [1]
Last year the bank said it was ‘seeking to improve [its] understanding of the impacts and dependencies – positive and negative – nature and biodiversity can have on [its] customers’ [2]. Without any substantive disclosure provided to date, it is not clear to shareholders how the bank is carrying this out.
INVESTIGATIONS CONTINUE TO LINK ANZ FINANCE TO DEFORESTATION, INCLUDING POTENTIALLY ILLEGAL CLEARING
Expansion of pasture for livestock has rendered Eastern Australia a global deforestation hotspot [3]. Official data shows that clearing in Queensland was in excess of 270,000 hectares in the last reporting period [4], which was almost nine times more than clearing for the entire Indonesian palm oil sector during the same period [5].
The Australian Conservation Foundation’s (ACF) most recent investigation identified 2,449 hectares of deforestation linked to ANZ finance [6]. The investigation only examined a portion of the deforestation occurring in Australia and ANZ’s actual exposure could be much larger. None of the cases linked to ANZ obtained federal approval despite many of them likely meeting the threshold for impacts on threatened species habitat requiring referral under Australia’s Environment Protection and Biodiversity Conservation (EPBC) Act 1999.
The Responsible Investment Association of Australia’s 2024 survey of bank customers found 83% of customers wanted a commitment from their bank to protect biodiversity [7]. The destruction of habitat for iconic Australian species like the Grey Falcon (the bank uses a falcon animation to market fraud protection), Koala and Pink Cockatoo is clearly misaligned with consumer preferences, creating reputational risk for the bank. This risk is growing as more consumers recognise ANZ’s role in financing deforestation.
DEFORESTATION GIVES RISE TO CREDIT RISKS, CONCENTRATED IN AGRIBUSINESS LENDING
ACF’s investigations have found that ANZ has the second highest cumulative hectares of deforestation linked to any Australian bank with 45,753 hectares. The materiality of ANZ’s deforestation-related risk exposure is not however limited to customers engaging in deforestation - it extends to all sectors that depend on nature, with agriculture among the most dependent [8].
Deforestation leads to reductions in biodiversity, disruption to the water cycle, degraded soil, increased likelihood of physical climate events and carbon emissions. These impacts are reducing the resilience of Australia’s ecosystems and the ecosystem services that agribusiness customers depend on. Soil degradation in Australia is estimated to cost $224 billion annually in lost ecosystem services and production capacity [9].
Combined with lower rainfall, fewer pollinators and pest controllers, deforestation hinders farm profitability and the value of loan collateral. This has credit risk implications for agribusiness lending, to which ANZ’s exposure grew over 20.8% in FY25 to $39.5bn [10].
DEFORESTATION INCREASING THE SEVERITY OF CLIMATE RISKS ACROSS ANZ’S LOAN PORTFOLIO
Deforestation is a climate risk multiplier, increasing the likelihood of drought, while also drastically increasing flood risk in catchment areas by up to 700% [11]. While ANZ has not conducted a physical risk assessment of its agriculture exposure, the bank estimates 2.7% of its consumer lending is currently vulnerable to climate perils [12]. World Bank analysis has found severe disaster episodes have raised non-performing loans by 0.6% in the years following [13]. With a rising insurance protection gap in Australia [14], reducing deforestation is a necessary mitigant to limit future impairments in the consumer and business bank.
Emissions from forest loss, which averaged 55 million tonnes of CO2-e since 2000 [15], are also contributing to increasingly frequent and severe climate events. ACF’s investigations have estimated 2.9 million tonnes of CO2-e from deforestation linked to its finance through its last two investigations. These emissions must be addressed by the companies accountable for them, including ANZ, however the bank has not disclosed how it aims to address these emissions despite producing a climate report since 2017 [16].
TRANSITION RISK FROM ANZ CUSTOMERS FAILING TO IMPLEMENT DEFORESTATION-FREE SUPPLY CHAINS
Major beef buyers in Australia and overseas have committed to no-deforestation, including Coles, Woolworths, McDonalds and Aldi. With regulations arising to meet the commitments made by national governments to the Glasgow Declaration, including Australia and the largest importers of Australian beef, the market for deforestation-free beef will continue to grow.
The bank’s livestock customers that fail to adopt nature-positive practices risk losing access to high value markets, so there is a clear incentive for the bank to identify and support these customers in a pathway to deforestation-free. ANZ has not disclosed any initiatives to this end.
A PATHWAY TO DEFORESTATION-FREE FINANCE IS REQUIRED TO REDUCE RISK
Global peers throughout Asia, South America, the EU and UK are making progress towards their deforestation-free commitments. Forty-one percent of the largest financial institutions globally have set a deforestation-free commitment for one or more commodities.
A pathway to achieve deforestation-free finance allows time for implementation and would reduce physical and transition risk exposure across the bank’s loan portfolio over time. The pathway steps could be aligned with best practice guidance from The Accountability Framework initiative: a credible framework used by companies globally to set and implement deforestation-free commitments [17].
With no steps being disclosed to date, the concern remains that ANZ does not intend to address impacts from deforestation and close the gap to domestic peers Westpac and NAB [18].
References:
[1] https://pollinationgroup.com/wp-content/uploads/2023/11/Joint-Memorandum-of-Opinion-Nature-related-risks-and-directors-duties.pdf
[2] https://www.anz.com.au/content/dam/anzcomau/about-us/anz-2025-climate-report.pdf
[3] https://wwfint.awsassets.panda.org/downloads/deforestation_fronts___drivers_and_responses_in_a_changing_world___full_report_1.pdf
[4] https://www.qld.gov.au/environment/land/management/mapping/statewide-monitoring/slats/slats-reports/2023-24-slats-report
[5] https://news.mongabay.com/2026/05/loopholes-undermine-palm-oil-industrys-antideforestation-pledges/
[6] https://www.acf.org.au/publications/reports
[7] https://cdn.prod.website-files.com/67a17dcc2362afe3723b9c97/6850b48ad3c0cc469be2352e_From-Values-to-Riches-2024_RIAA_compressed.pdf
[8] https://www.acf.org.au/publications/reports
[9] https://www.robertcostanza.com/wp-content/uploads/2017/02/2016_J_Sutton_ELD_LandDegradation.pdf
[10] https://www.anz.com/content/dam/anzcom/shareholder/1H26-results-announcement/1H26-ANZ-Results-presentation-and-IDP.pdf
[11] https://doi.org/10.1038/s43247-025- 02748-6
[12] https://www.anz.com/content/dam/anzcomau/about-us/anz-2025-climate-report.pdf
[13] https://documents1.worldbank.org/curated/en/099614202282325736/pdf/IDU010b823eb0a253042430a92f0c19e5f0c80bc.pdf
[14] https://www.apra.gov.au/news-and-publications/mind-gap-insurance-climate-vulnerability-assessment
[15] https://canopy.acf.org.au/m/1bdee9bee85112cb/original/How-claims-of-a-net-increase-in-forest-cover-mask-the-truth-about-the-environmental-impact-of-land-clearing-in-Australia.pdf?_gl=1*1lbejud*_gcl_au*Mzc1MTE4MjAzLjE3Nzk2ODgyNDY.*_ga*MjEwNTg2NTU4OS4xNzU1ODM4OTg0*_ga_F2SYMWY8QD*czE3ODE3NDQzMTMkbzYyJGcwJHQxNzgxNzQ0MzEzJGo2MCRsMCRoMA..
[16] https://www.anz.com.au/about-us/esg/reporting/
[17] https://forest500.org/wp-content/uploads/2026/06/F500_2026_FinanceReport_FINAL.pdf
[18] https://canopy.acf.org.au/asset/2f9cbd66-126d-4c91-ab10-f5ed47180693/2604_Corporate_GuideOnDeforestation_FINAL.pdf
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