Could Westpac Drive a Surge in Zero Deforestation Commitments?

The Big 4 and Macquarie are among the Top 40 Global Banks who have signed up to the Taskforce on Natural Related Financial Disclosure targets for deforestation, land clearing, biodiversity and conservation.

Fri 10 Nov 23


The leader of The Nationals has urged the Australian Government to step in and protect farmers from Westpac’s move to establish ‘deforestation’ targets on agricultural commercial lending.

Yesterday, David Littleproud said Australia had some of the world’s strictest native vegetation protection laws and has called on the Federal Government to “change the conditions of its banking licences.”

His concerns centre around Westpac’s natural capital position statement, which, for the first time, sets environmental, social and governance (ESG) targets for the bank’s loans to agriculture (dairy, beef and sheep). 

It also 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.”

The move is backed by the Australian Conservation Foundation (ACF), with Jonathan Moylan, ACF’s corporate campaigner, hoping that the commitment will “drive a wave of zero-deforestation commitments across Australia’s banking 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.”

Wood Central understands that the latest commitment is connected to developing a new global nature-positive framework, with Westpac working towards becoming Australia’s first nature-positive bank.

As reported last month, the Australian Big Four Banks, Macquarie, and 40 of the world’s largest financial institutions are behind a new standard to make financial investment ‘nature positive.’

The collective is pushing the Australian Government to include the new standard in the soon-to-be-released “sustainable finance” agenda.

In addition, they are demanding action on biodiversity, deforestation and land clearing as part of a general push to ensure that nature “is considered alongside financial, operational and climate risks.”

Wood Central can reveal that Australian banks are at the forefront of the push to use satellite mapping technology to determine the boundaries of properties they are funding and to see the impact of land clearing, deforestation and water use on land.

As reported in the Australian Financial Review, the Commonwealth Bank of Australia, ANZ, Rabobank, and ING are already working with start-up Digital Agriculture Services to map the boundary lines of every rural property in Australia, with the Australian Conservation Foundation pushing to go further.

“The key for business is to use the work on the climate disclosure to build up / accelerate nature,” according to Andrew Peterson, who spoke to FS Sustainability’s Rose Mary Petrass and Rachel Alembakis.

Australian banks are at the forefront of the push to use geospace mapping to make finance decisions—footage courtesy of London Stock Exchange Group.

With Westpac’s new natural capital position statement, they have become the first Australian bank to embrace natural-related financial disclosure targets for deforestation, land clearing, biodiversity, and conservation within its corporate policy.

Its impact on the forest industry is unknown; however, the Wood Central Publisher spoke to an Australian-based industry association claiming that members could not obtain finance due to “ESG” concerns.

Under the policy, Westpac is committed to “achieve a balance between deforestation and restoration of natural forests,” with an “aim of seeing the area of natural forested land remain stable or increase over time.” 

“While we ultimately want to see no clearing of individual forests,” the policy states, “where that is not possible (for example, for building housing or infrastructure), we aim to work with customers to balance these impacts via conservation or reforestation initiatives.”

The new statement was published on Monday. Click the link to download the new report.

This morning, the Wood Central Publisher spoke to a source connected to Nature Positive Framework, who said the key to addressing deforestation is ensuring that lands are subject to sustainable forest management.

“There are a lot of myths and mistruths when it comes to timber and sustainable forest management – both for natural and plantation forests,” they said.

Supporting this, Matt de Jongh, Responsible Wood’s Sustainability Manager, pointed out that “sustainable forestry does not cause deforestation.” 

Mr de Jongh will be one of four presenters addressing the myths plaguing the adoption of timber in Australian building and construction projects next Wednesday (4 pm AEDT).

Hosted by MECLA WG5f Chair Stephen Simpson, Design Director at Mulpha International, it will feature Tim Woods, Managing Director at IndustryEDGE, Karl-Heinz Weiss, Director at Weiss Insights and Steve Mitchell, Principal Consultant from Thinkstep.

According to Mr Simpson, “timber has diverse use cases and is already used commercially structurally and in fit-outs. However, many barriers still exist to the uptake of more timber in construction in Australia.” 

“Often, these barriers are misperceptions: does sustainable forestry still cause deforestation? Are there supply challenges? What is the fire risk and insurability of timber buildings? And is carbon stored in wood emitted at the end of life?”

Timber – and, by extension, sustainable forest management also plays a vital role in achieving net-zero embodied emissions, a key focus of Westpac’s involvement with the Net Zero Banking Alliance.

In a new report published by the UN, substituting carbon-intensive building materials, like steel and concrete, for bio-based materials, including timber, bamboo, and biomass, will save emissions up to 40% by 2050.

It has also raised concerns about processing concrete, steel, and aluminium, with the “three sectors responsible for 23% of the overall global emissions.” 

“Priorities should be placed on electrifying production with renewable energy sources, increasing the use of reused and recycled materials, and scaling innovative technologies,” the report said.

In addition, “transformation of regional markets and building cultures through building codes, certification (which includes FSC, PEFC and Responsible Wood), labelling and education are critical.”

  • For more information about “the MECLA Spotlight on Timber Myth Busting”, click the link.


  • Jason Ross

    Jason Ross, publisher, is a 15-year professional in building and construction, connecting with more than 400 specifiers. A Gottstein Fellowship recipient, he is passionate about growing the market for wood-based information. Jason is Wood Central's in-house emcee and is available for corporate host and MC services.


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