Opportunity Analysis: Enhancing Biodiversity and Valuing Natural Capital

The Australian grains industry is at risk due to unpreparedness for new sustainability and nature risk reporting requirements, such as the Taskforce on Nature-related Financial Disclosures (TNFD). These initiatives could affect growers' access to finance and require additional data at their own expense.

In 2023, the Grains Research and Development Corporation (GRDC) commissioned a review to assess the risks and opportunities of ecosystem services markets. The report, completed by Aton Consulting in 2024, found limited commercial benefits from current initiatives. Growers and other agricultural sectors emphasize the need for harmonized metrics and improved data collection through existing farm tools to better understand the impact of natural capital markets.

This investment will conduct an opportunity analysis to identify risks and establish a biodiversity baseline for the Australian grains industry. Stakeholder consultations will provide actionable insights and recommendations. The analysis will assess growers' knowledge, legal requirements, financial considerations, productivity, social impacts, motivations, and barriers to adopting biodiversity-enhancing practices. It will also review definitions, methodologies, and internationally recognized metrics relevant to biodiversity and natural capital, and evaluate current natural capital accounting tools.

The analysis will establish baseline data, identify future trends, and compare growers' data with stakeholder targets. It will assess the impact of on-farm decision-making on market access, finance, and community trust, and develop risk mitigation strategies. Tools for integrating biodiversity and natural capital into decision-making will be explored, along with their interaction with productivity and profitability. Connections with existing GRDC sustainability investments will also be identified.

The findings will guide the development of a biodiversity and natural capital research, development, and extension initiative for the grains industry.