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Ethical investors shaping nature risk tool

Protecting natural capital is the purpose behind a new reporting and assessment tool being developed by Australia’s ethical investors.

Endorsed by the global financial sector, G7 finance ministers and G20 environment ministers, a proposed framework will show companies how to measure and report on nature-related risks.

The Responsible Investment Association Australasia (RIAA) announced on Wednesday it will run the detailed consultation for Australia and New Zealand as part of a global market-led body of work.

A prototype framework is being fine-tuned by six regional working groups for the global Taskforce on Nature-related Financial Disclosures (TNFD), which aims to shift financial flows from activities that harm the natural environment to “nature-positive” investment and business.

Guy Williams, a TNFD taskforce member and Deloitte executive, said the framework represents a “seismic shift” in how nature is valued and properly managed.

“We have a chance to ensure Australia and New Zealand help guide this shift to build a new global best practice for nature.”

Simon O’Connor, CEO at RIAA, said more than half of global economic output is dependent on biodiversity and ecosystem services.

There is strong momentum to better account for and value assets on the basis of nature-related risks and how they are managed, he said.

The taskforce is aligned with the aspirations of the United Nations Convention on Biological Diversity’s (CBD) framework for no net loss of global biodiversity by 2030 and a net gain by 2050.

Australasian business, finance, government and civil society organisations will work together on final recommendations due by September 2023.

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