Building Biodiversity: Australian nature credit markets beyond the TNFD
In September 2023, the Taskforce on Nature-related Financial Disclosures (TNFD) was launched in New York with a series of guidelines and resources.
The Action Exchange is proud to partner with law firm Clayton Utz to launch this thought leadership report, Building Biodiversity: Australian Nature Credit Markets Beyond the TNFD.
The report explores the way the Taskforce on Nature-related Financial Disclosures (TNFD) is likely to shape emerging voluntary Australian biodiversity credit markets that will fund nature protection and restoration. It includes an examination of the risks, opportunities and legal considerations businesses will need to consider to manage the financial impacts they face from the degradation of the natural environment.
Key findings:
Australian companies need to act fast on TNFD. Those that move quickly to integrate climate and nature reporting will have a first-mover advantage.
Biodiversity credit markets are nascent. But a tipping point has been reached where companies and investors are prepared to invest in market-based solutions.
The structures, regulatory environment and data solutions needed to underpin nature markets are emerging. Improved levels of funding, policy development, and corporate cooperation will be needed, together with robust accounting and verification regimes, to grow this opportunity.
Getting started will lead to solutions. No one has ideal data or disclosure at such an early stage of market development. Those who can invest using clear strategies, due diligence, and verification will help develop solutions to these challenges.
Climate change and nature are inherently linked. Nature-based solutions will become a vital environmental risk management tool for mitigating biodiversity risk, climate adaptation risk, and boost domestic and global food security.
Carbon and biodiversity markets will begin to overlap. This will make for an increasingly complex investor landscape as parties seek to maximise the value of sales and purchases, and minimise their risks.
Innovation and partnerships are critical. New instruments and structures beyond biodiversity credits that meet different investor needs will be required if Australia is to become a world-leading biodiversity market.
Agriculture is a foundation for Australian nature credit markets. Project proponents need to consider how to maximise the value of their landholdings to achieve holistic nature-positive, carbon reduction, and food supply outcomes.
Read the thought leadership report: Building Biodiversity: Australian nature credit markets beyond the TNFD.
