Six takeaways for directors from the Global Nature Positive Summit

Last week, Sydney hosted the world-first Global Nature Positive Summit (Summit), bringing together leaders from government, business, and environmental organisations. Minister for the Environment and Water, Tanya Plibersek, opened the Summit by stating that “this Summit aims to accelerate collective action to drive investment in nature and strengthen activities to protect and repair our environment.”

The Summit began with a call to action: nature is in crisis. Experts shared alarming statistics on the accelerating decline in biodiversity and the vital link between human well-being, environmental health and economic prosperity. In a video message, UN Secretary General António Guterres said “Humanity needs to make peace with nature”.

On a positive note, there was recognition that natural environments can bounce back quickly, and on shorter time scales than climate related impacts.

Ahead of the Summit, the AICD and ten other Australian business, finance, investor and civil society groups released a Joint Statement on Nature. The Joint Statement emphasises the critical importance of nature protection and restoration, noting nature underpins Australia’s economy. The statement aims to raise corporate awareness of issues including reliance on nature for economic growth and the pressing need to address biodiversity degradation.

The global Taskforce on Nature-related Financial Disclosures (TNFD) announced that 23 Australian organisations had committed to voluntary reporting of their impact and dependency on nature in line with the TNFD recommendations, including ASX listed companies Qantas, Telstra, and Brambles.

Six key takeaways for directors

1. Understanding and measuring nature will have long-term benefits

Natural capital is the value of everything that comes from nature. In Australia, roughly half ($896 billion) of the nation’s GDP has a moderate to very high direct dependence on nature.[1]

Understanding an organisation’s impact and dependence on nature and biodiversity should be the entry point for businesses. By measuring the value of nature, boards will be able to make better decisions and build sustainable growth into the future.

As with climate change, organisations are beginning to see nature and biodiversity as material financial risks for their organisations. Additionally, the perception that nature and climate efforts come at the expense of economic efficiency are shifting, with many finding they can be drivers of growth and value creation.

There are free tools available to help measure your organisation’s natural capital. For example, the Natural Capital Measurement Catalogue, created with input from a technical reference panel and over 50 organisations, serves as an open-source resource for consistent measurement of natural capital. It outlines what to measure and how, providing publicly available data sources for most metrics.

The Catalogue can aid landowners and managers—such as farmers, mining companies, and governments—in understanding the size, condition, and benefits of their natural assets, while also helping all organisations assess their impact on and reliance upon nature.

2. Adopting an integrated approach to climate and nature is critical

Changes to natural habitats and biodiversity loss are inextricably linked with climate change drivers and impacts. Panellists at the Summit highlighted that an effective corporate climate strategy should integrate the conservation and restoration of natural environments, recognising that a healthy planet is essential for mitigating climate change.

To meet climate goals, businesses should adopt nature-based solutions that address environmental concerns while driving innovation and economic growth.

Some Australian organisations have begun taking an integrated approach to climate and nature. For example, Blackmores has implemented initiatives to reduce their carbon footprint, such as sourcing sustainable ingredients and promoting biodiversity through partnerships with organisations focused on restoring natural habitats.

Telstra has also been actively working to integrate environmental sustainability into its operations. It has set targets to reduce carbon emissions and has committed to using renewable energy sources. Telstra also focuses on minimising the environmental impact of its infrastructure, including initiatives to protect and restore local ecosystems.

For directors considering where to start, Australian forestry manager Forico produced a world-first Illustrative Example of Integrated TCFD + TNFD Disclosures last year as an example to aid businesses looking to develop their own reporting.

3. Challenges with defining ‘nature positive’

There is currently no agreed definition of what ‘nature positive’ means. The Australian Government's Environmental Protection and Biodiversity Conservation (EPBC) reforms, currently before Parliament, aim, amongst other things, to define ‘nature positive’ in Australia as “an improvement in the diversity, abundance, resilience, and integrity of ecosystems from a baseline”.

If passed, this will be the first time any government has defined the term in legislation.

Until legislation is passed, there is still a challenge for business in defining what nature positive means. What is the baseline? What does it take to say your organisation is nature positive without being subject to greenwashing risk?

These points were acknowledged at the Summit, but panellists emphasised that the rate of nature degradation is so concerning that defining nature positive should not prevent action now. As emphasised by Minister Plibersek, “The approach should be to try and leave the places around us in better shape than before.”

Civil society encouraged companies to explain their nature related impacts and dependencies, rather than focusing on legal risks. There was acknowledgement that the risk of litigation may be less pronounced than in the climate arena where the largest emitters and fossil fuel companies have been a natural target for activists.

4. Evolving market expectations will increasingly impact Australian business

Market expectations are rapidly evolving, driven by pressures from investors, regulators and activists. For instance, the European Union’s Common Sustainability Reporting Directive is set to mandate its first nature reports next year (based on the TNFD), highlighting the increasing focus on sustainability in business practices.

In Australia, super funds are beginning to set nature related targets. CEO of HESTA, Debby Blakey, stated in her letter to companies on the fund’s stewardship priorities that “Nature loss and decent work are emerging areas of concern for investors and we’re encouraging the ASX300 to prioritise these issues given the potential negative impact to long-term financial performance.”

The Australian Prudential Regulation Authority (APRA) is increasingly focused on environmental sustainability, including nature-related risk. APRA encourages financial institutions to assess and manage environmental risks, including those related to natural ecosystems[2] and has issued guidance on integrating climate-related risks into business strategies and operations, emphasising the importance of considering biodiversity in this context.[3]

The Australian Government is taking a ‘climate first, but not only’ policy. Nature is expected to be the next cab off the rank, although Minister Plibersek at the AICD’s Climate Governance Forum stated that there were no immediate plans to mandate nature reporting. For the time being, the focus is on encouraging voluntary disclosure and building awareness and capability in the business community.

This regulatory shift underscores the need for businesses to adapt to these new expectations to remain competitive in a global market increasingly prioritising nature and biodiversity.

5. Collaboration will be essential

Collaboration was a key theme of the Summit. Ravi Menon, Singapore’s ambassador for Climate Action and former governor of the central bank, emphasised the importance of public-private partnerships (PPPs) in addressing nature-related challenges. Menon emphasised the need to focus not on green finance, which was a small fraction of global capital flows, but on greening the far greater category of “brown finance”.

In Australia several networks have been established to help support businesses transition to being nature positive. For example, the Australian Government’s Nature Positive Matters coalition, a public-private initiative was launched at the Summit. The initiative involves more than 20 organisations including Blackmores, AACo, Wesfarmers, Bega Group, Qantas, Rest Super and Lion Group.

Members of the coalition will work together to support business uptake of nature-related reporting and data collection, and pilot programs to inform policies and investment decisions that are good for nature.

Collaboration across industries will also be critical to addressing the nature crisis. It was noted that antitrust/competition law should not act as an impediment to achieving these goals. See the AICD’s submissions to the ACCC and Treasury to address this important point.

6. Vital role of Indigenous knowledge in nature stewardship

Relative to climate, nature risks are typically geographically localised, necessitating engagement with communities and First Nations peoples. There was a strong emphasis at the Summit on the value of Indigenous expertise in biodiversity conservation and sustainable practices informed by thousands of years of relationship with the land.

A First Nations statement  was presented to Minister Plibersek at the Summit calling on “government and business to engage Indigenous peoples on all ‘nature positive’ decision making processes and outcomes.” The joint statement, co-written by First Nations advisers from WWF-Australia and the Australian Conservation Foundation, was signed by more than 40 groups and individuals.

Several speakers underscored the importance of integrating Indigenous perspectives into nature conservation strategies to enhance biodiversity outcomes and promote more effective stewardship of natural resources.

Governments elsewhere in the Pacific, including New Zealand, have gone further by providing natural sites with legal personality as a way of highlighting its importance and giving nature a distinct role in key decisions.

Other takeaways:

• Innovative solutions are already underway: The Summit highlighted groundbreaking projects and technologies aimed at restoring habitats and enhancing biodiversity. From nature-based solutions in urban planning to advancements in conservation technology, participants explored diverse approaches that can be scaled globally.
• Nature negative subsidies in the spotlight: NGOs are also increasingly focused on tackling ‘nature negative’ subsidies. A recent report from the Biodiversity Council revealed that 4% of the Federal budget —around $26.3 billion annually—subsidises activities with a medium to high adverse impact on biodiversity. In their view, addressing these harmful subsidies is essential to promoting sustainable practices and protecting biodiversity.
• Impacts of renewable energy rollout on nature: The rollout of renewable energy in Australia presents a challenge as it often involves land use changes that can negatively impact local ecosystems and biodiversity. Balancing the pressing need for clean energy with the preservation of natural habitats requires careful planning and integrated strategies to ensure that environmental degradation is minimised. This requires developers, community and Traditional Owners working hand in hand.

What is the AICD doing on nature and biodiversity?

The AICD is the host of the Climate Governance Initiative Australia and a key priority through this network is to support directors to strengthen the governance of sustainable business practices. As Australia strives to achieve our climate goals, it will be essential for businesses to engage in nature-based solutions that not only address environmental concerns but also drive productivity and economic growth.

The AICD has released content on nature and the TNFD for our director community. To help directors get started with nature-related risk assessment, please refer to Biodiversity as a material financial risk: What board directors need to know. We are also developing guidance for directors on nature-related risk assessment and disclosure, informed by the TNFD recommendations.

[1] Australian Conservation Foundation research: $900bn of Australia’s economy directly depends on nature, 6 September 2022.

[2]Prudential Practice Guide on Climate Change Financial Risks (CPG 229).

[3]Prudential Standard CPS 220: Risk Management.