Banks play a critical role in enabling activities that can either worsen or reduce the risks of nature loss through financing both the causes of, and solutions to, the nature crisis. And while the value of nature goes beyond financial, to include social, health and climate benefits, superannuation funds are now increasingly recognizing the ways in which nature destruction causes financial risks that interfere with their obligations as long-term universal owners.

This is the second iteration of the Australian Conservation Foundation’s nature risk survey and report. First published in 2022, the report seeks to assess how ten banks and ten super funds are addressing nature-related risks in their portfolios. In doing so, the report provides a snapshot of how Australian financial institutions are addressing nature risk, where progress is being made, and where more action is needed.

Key findings:

• When it comes to assessing and disclosing nature risks and setting targets, banks have progressed more quickly than super funds.
• Banks and super funds have made clear progress, with more institutions having performed nature-related assessments in 2024, compared to 2022.
• While most banks and super funds have identified nature as a material risk and have incorporated nature into sustainability policies, few funds have nature-specific policies aimed at addressing the nature-related risks and opportunities in their portfolios.
• Data challenges were identified as a key barrier for the integration of nature-related issues into decision-making. Evidence shows that data exists, however most banks and super funds appear to be struggling to find and match different data sources to progress their nature work.
• Perceived pressure from Australian regulators has dropped since 2022. As such, greater advocacy from financial institutions is needed to support regulators to implement mandatory nature-related risk disclosures to ensure Australia doesn’t fall behind international jurisdictions.