Australia’s biodiversity market: challenges across the industries

The Australian nature repair market is fast approaching, yet corporates grapple with various challenges across the burgeoning sector. From agribusinesses struggling with on-ground measurements to major supermarket chains wrestling with global supply chain intricacies, the landscape of nature-related issues is becoming increasingly complex.

The current roadblocks

Agribusinesses stand at the frontline within Australia's nature-dependent sectors. The responsibility sits squarely on their shoulders to accurately measure their impact on nature. However, this is easier said than done, with the agriculture industry still uncertain in determining which aspects of biodiversity to quantify and how to effectively scale these measurements. Factors including changing vegetation, differing flood conditions and crop rotation all impact baseline measurements, which the market relies on.

Companies with extensive global supply chains confront a different but equally pressing problem – the challenge of data. The more extensive the supply chains, the more difficult it is to track your business's biodiversity impact. The complexity amplifies when exporting products overseas, where accurate data is vital to maintain access to overseas markets. 

Similarly, the challenge of enforcing Australian biodiversity standards for businesses reliant on imported products will become increasingly important. For businesses heavily dependent on specific imports, the challenge of enforcing Australian biodiversity standards overseas, if biodiversity risks arise, remains a mystery. 

Investors, meanwhile, encounter an entirely distinct set of challenges as they endeavour to embrace the nascent biodiversity market while minimising risks. Banks and super funds are wary of investing too soon. Despite advanced sustainability ambitions, biodiversity remains in its infancy at board meetings. The Australian business landscape continuously asks for well-defined frameworks and a more mature market ecosystem before significant investment in biodiversity projects.

The path forward

Whilst Australian businesses hold their breath for the Task Force on Nature-related Financial Disclosures (TNFD) in September, it’s critical to remember the framework will not inherently solve these problems across Australian industries. Developing scalable measurement technologies and proxies for biodiversity could potentially solve some of the major issues. Educating businesses on nature will ensure we learn from previous market mistakes. The nature repair market road is scattered with challenges, but taking the first steps is imperative to combat biodiversity loss.

Read our latest report, Building Biodiversity: Australian nature credit markets beyond the TNFD.