Disastrous State of the Environment also has serious financial risks – ACSI

The State of the Environment report, released by the Federal Government today, paints a disturbing picture of Australia’s natural world in disastrous decline. Beyond the threat of permanent loss of wildlife and nature, this can also have a calamitous impact on society, culture and economic activity.

Biodiversity loss is estimated to wipe up to A$27 billion from the Australian economy annually by 2050, according to the Australian Council of Superannuation Investors (ACSI).

“Biodiversity loss, like climate change, must be confronted with the urgency, ambition and a clear plan for action,” ACSI CEO Louise Davidson said.

“Biodiversity loss creates significant and material risks for investors.”

The State of the Environment report makes for bleak reading, but it is also constructive and forward-looking, presenting opportunities to confront and halt the impacts to our natural world and the consequential impacts on society and wellbeing.

ACSI notes and welcomes the involvement for the first time of Indigenous co-authors in compiling the report.

“We welcome the report’s emphasis on collaboration.  ACSI supports legislative and other reform to ensure higher standards and greater alignment across Australia so First Nations people can effectively protect their cultural heritage and lands. Companies also have an important responsibility to respect First Nations cultural heritage,” Ms Davidson said.

As ACSI research, Biodiversity: unlocking natural capital value for investors, highlighted in late 2021, more than half the world’s economic output – estimated at $60 trillion – is dependent on nature, and an estimated 60% of animal populations, including mammals, birds, fish, reptiles and amphibians have declined over the past 40 years. Food, infrastructure, transport, agriculture, property, energy and fashion industry value chains account for much of the global biodiversity loss, with primary industries such as forestry, fishing and agriculture the worst affected.

ACSI members, superannuation funds and large institutional investors, focus on environmental, social and governance (ESG) risks and opportunities because they have a material impact on investment outcomes. As fiduciary investors, they have a responsibility to act to enhance the long-term value of the savings entrusted to them. 

Australian investors and listed companies should act now to understand and manage biodiversity related risks and opportunities.  We are encouraged by the work of the Taskforce for Nature related Financial Disclosures (TNFD), and recommend companies prepare for its adoption.

“We welcome the commitment by Minister Plibersek  to formally respond to the Samuel Review recommendations and look forward to further consultation and real, meaningful action,” Ms Davidson said.

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