Developing nature-based solutions to the climate challenge

By  Ruth Dawkins 9 September 2024 5 min read

Nature plays a crucial role in helping us respond to climate change. It can sequester carbon and regulate temperatures. It helps control flooding and erosion. And it provides sustainable resources and supports biodiversity.

That’s why protecting our ecosystems, living organisms, and natural processes is integral to tackling the climate challenge. It’s also a worthwhile activity in its own right.

Global business of biodiversity

Our global economy is underpinned by nature. According to the World Economic Forum, more than half of the world's Gross Domestic Product (GDP) depends on nature to provide goods and services.

But nature is under threat. Habitat degradation and biodiversity loss pose significant threats across Australia and the rest of the world. The latest WWF Living Planet Report found monitored wildlife populations have experienced a devastating 69 per cent decline since 1970.

As a result, we're expecting wide-reaching impacts on environmental health, disaster resilience, cultural integrity and wellbeing, trade, and food security. So, it's not surprising that countries around the world are committing to the ambitious goals of the Global Biodiversity Framework.

Australia is hosting the inaugural Global Nature Positive Summit in October 2024, and local organisations are seeking ways to safeguard biodiversity through their operations.

Valuing our natural capital

Senior Research Scientist Dr Sam Nicol is working on ways to help businesses assess natural capital, and better understand their impacts on the environment.

Natural capital is the term used for assets which, directly or indirectly, deliver well-being for humans. Things like fresh water, fertile soils, clean air and living organisms.

In Australia, 77 per cent of the country’s land is managed privately. This means the private sector can play a huge role in growing our natural capital.

"We know from our work that a lot of private sector organisations are interested in questions like how to measure biodiversity, or how to disclose their relationship with nature – but they don’t really know how to start," Sam says.

“There’s huge ambition within industry to take action. Our role is to provide the tools and approaches that will translate that goodwill into practical, tangible action."

Supporting businesses to account for nature

It’s simple for businesses or countries to set targets for emissions reduction. A standard unit of carbon is the same, no matter the context. But factoring impacts on nature and biodiversity into decision making can be a lot more complex.

The key challenges with natural capital accounting include working out what to measure, how to measure it, and what sort of meaningful targets can be set.

Research Director of our Living Landscapes program, Dr Libby Pinkard, says the best approaches emerge when businesses are open and transparent about what they are trying to achieve.

"I think we need to recognise that biodiversity is a subjective term," Libby says.

"What matters to one organisation may not be relevant to another. That’s why explicit targets are helpful to define what aspect of biodiversity an organisation is focusing on. For some, that might be habitat condition. For others, koala management or water quality.

"Providing they’re open and transparent, I would prefer to see organisations set a range of different targets that are appropriate for their operations, than see them spend more time debating definitions and using that as a reason for not doing anything," she says.

By the Handbook

One way we’re supporting businesses in their efforts is through the Natural Capital Handbook.The handbook aligns with the global market-led initiative Taskforce on Nature-related Financial Disclosures (TNFD).

It's a practical, step-by-step guide for farmers, forest growers, mining companies, and non-governmental organisations on how to report and account for their natural assets.

"We understand that the number of different processes and pathways and reporting requirements out there is very confusing," Sam says.

"There are a lot of different ways for businesses to navigate this space. The handbook really tries to clarify some of that: what is an account, what is a disclosure, how might you report that.

"We’ve tried to answer those questions across different sectors in a very practical way. The feedback we’ve had on it so far has been very positive," he says.

Natural capital accounting solutions

Now, we’re building on that work to guide businesses through the process of how to measure and incorporate natural assets such as clean air, water, soil, and living things into their financial books.

We’re doing this by developing a digital natural capital assessment product, NatureIQ^TM. This is a Software as a Service (SaaS) offering, which translates our deep ecological expertise into a cloud-based solution.

NatureIQ^TM supports companies to quantify their baselines for impacts on biodiversity and nature. It also identifies areas with the greatest opportunity for restoration. And enables organisations to disclose relevant metrics in line with global reporting requirements.

Head of Product for NatureIQ^TM Swaroop Tulsidas says we’re hearing there’s a real hunger from companies for science-based insights.

"The kind of insights that organisations will be able to access and leverage through NatureIQ^TM will allow them to stand by their actions," Swaroop says.

"They might not be at a stage where they can claim to be nature positive, but they will be able to very openly show what actions they’ve taken, what impact those actions have had, and what progress they’ve made towards targets."

Ambitions for the future

Our extensive work in natural capital accounting means we’re well placed to support businesses and government going forwards. But Sam and Libby both acknowledge that challenges remain.

"We’re doing what we can in providing scientifically rigorous methodologies and scientifically robust data," Libby says.

"We know that for a lot of organisations, the story is not going to be a good one to start off with. Pretty much every organisation has had some kind of negative impact on biodiversity outcomes.

"But it’s the trajectories of change that are important, and whether you’re actually starting to turn things around."

Sam agrees the next step is to focus on implementation.

"There isn’t a one-size-fits-all approach, so we need customised solutions," Sam says.

"We need to support different sectors to develop effective actions that are scalable, durable and equitable. I’m confident that our longstanding approach of industry collaboration will stand us in good stead to make that happen."