Who this guide is for

This guide is a resource for institutional investors engaging with Australia’s largest listed supermarkets and banks on the design and implementation of their deforestation-free commitments. It outlines a step-by-step pathway for these companies and provides an assessment of where Coles, Woolworths, ANZ, CBA, NAB and Westpac currently sit on their pathway.

Why it was produced

This guide was produced to help investors set engagement objectives and inform proxy voting decisions, supporting investee companies to progress towards deforestation-free supply chains and finance. Supermarkets and banks are integral components in the system driving deforestation in Australia, and system-level stewardship should focus on these companies.

The case for investors to engage on deforestation

Large-scale deforestation is still occurring in Australia. Most deforestation in Australia is to expand cattle pasture in Queensland and New South Wales, with a recent report finding that 86% of clearing in Queensland is for pasture. Australia’s extinction crisis is worsening, with habitat loss and degradation the dominant driver, impacting 70% of threatened species. In Eastern Australia, deforestation over the five years to 2021 resulted in an average of 100 million wild animals, birds and reptiles being displaced, harmed or killed.

The sustainability of Australia’s agriculture sector is in jeopardy from land degradation and climate impacts driven by deforestation. With Australian bank lending to the agriculture sector growing 80% from 2019 to 2025, and now at $140 billion, the financial sector is also increasingly exposed to this sector-level risk. Furthermore, sediment and nutrient runoff from deforestation have damaged the world’s most extensive coral reef ecosystem. This has directly impacted reef-based tourism, which contributes $7.9 billion annually to Australia’s economy. There is an opportunity for supermarkets and banks to enhance shareholder value, with total Australian bank credit to beef farmers growing by 48.1% to $31.8 billion from 2019 to 2025.

Priority sectors for stewardship: supermarkets and banks

The largest ASX-listed supermarkets and banks are considered to be the most influential industries for investors to engage with. Major supermarkets can significantly influence beef supply chains, while Australia’s largest banks have a unique point of leverage to influence agribusiness customers by ruling out lending to customers engaging in deforestation.

Supermarkets: a pathway to deforestation-free beef

Coles and Woolworths have now set deforestation-free targets. These were set to be implemented by the end of 2025, but neither Coles nor Woolworths have achieved deforestation-free status for beef. The first step in the pathway requires a verifiable traceability system to enable geolocation of farms, assessment of nature-related risks and validation of deforestation-free status. Investors should advocate for the Federal Government to enable use of National Livestock Identification System data to verify sustainability credentials, fund a single source of truth for vegetation mapping, and establish Australia’s national deforestation-free roadmap.

Banks: a pathway to deforestation-free finance

For all banks, the pathway begins with adopting credible, science-based definitions of forest, deforestation, and related concepts. From here, they must gather the relevant data to focus efforts on risk exposure. Australia’s biggest banks are gradually beginning to recognise these steps. However, no bank has indicated an intention to set a commitment aligned with the Accountability Framework initiative. Westpac had a deforestation-free commitment for its finance to dairy, beef and sheep customers, but in late 2025 removed its formal commitment.

Next steps for engagement

Investors can undertake engagement using the pathways in individual engagements, existing investor-led collaborative engagements, or by joining engagements led by the Australian Conservation Foundation and SIX. If reasonable progress is not made, shareholders may choose to file deforestation-related shareholder proposals.