Can banks make a profit by investing in the Barrier Reef?


A study conducted by Friends of the Earth-affiliate Market Forces with global environmental group calculated Westpac, the Commonwealth Bank, ANZ and NAB have lent A$3.8 billion since 2008 for energy projects in the Great Barrier Reef World Heritage Area.

The groups called for people to "put their banks on notice" that if they "continue to fund dirty coal and gas" they will "risk losing you as a customer". But focusing on the negative consequences of coal investments is only half the story. The hard reality is that we cannot expect Australian banks to stop funding mining altogether. The question we need to be asking is - can banks make a profit by investing some of that coal money towards reef-friendly businesses?


There are a number of investment options that could prevent adverse impacts on the reef and reduce the current and future needs for marine conservation finance - while creating self-sustaining economic incentives for improving the state of the reef.

Making an impact with investment

"Impact investing" achieves environmental and social benefits while generating financial profit. It is more proactive than socially-responsible investing, which avoids negative external factors, because it requires positive and measurable benefits. Globally, the impact investing market is currently estimated at US$9 billion but investors surveyed by JP Morgan on behalf of the Global Impact Investing Network feel that the industry is "in its infancy and growing". Experts predict a US$500 billion industry globally by 2019.


In Australia, a broad range of "first movers" are generating profit by investing in affordable housing, renewable energy, early childhood education, and most famously, a social impact bond in New South Wales.

Green bonds

Green or environmental bonds operate similarly to other bonds but invest in "green" companies, usually in the renewable energy sector. Seven supranational banks (such as the Asian Development Bank) issued US$4.2 billion in green bonds in 2011-2013. Most notably, in March 2013 the World Bank's International Finance Corporation issued a $US1 billion green bond.



Revolving loan funds




Screening out, and in


In Australia and New Zealand, just under A$20 billion dollars is invested in "responsible investments" through screening, and the market grew 8% from 2010 to 2011. No banks have yet set up an investment product explicitly related to reef health, but current responsible investment products could be adapted to benefit the reef.


With UNESCO considering putting the Great Barrier Reef on the "in danger" list, it is urgently necessary for banks and environmentalists come together and invest in the reef's future.

Melissa Bos receives funding from the National Environmental Research Program.
