Natural capital courses and information for land managers

Find courses and learning opportunities to help you understand and engage with natural capital and environmental markets.

On this page

Introduction to natural capital

decorative publication cover

Local Land Services online pilot Introduction to Natural Capital course for farmers and land managers introduces you to the language of natural capital

Find out why natural capital is relevant to you and the steps you can take to explore new decisions for you and your farm or property. 

You will also learn about market opportunities for landholders and what to consider when making decisions about environmental markets.

This self-paced online course is provided free of charge for farmers and land managers in NSW as part of the NSW Local Land Services Natural Capital Support Services Program and is delivered by Tocal.

To enrol in the course, visit the Tocal College website.

Natural Capital Conversations

In partnership with AgriPark, the Local Land Services Natural Capital Conversations conference in May 2024 gave land managers and producers a forum to connect, share insights, exchange ideas and explore ways to strengthen their understanding of natural capital opportunities and risks.

A panel of experts shared their knowledge and created opportunities to learn and discuss:

  • natural capital fundamentals
  • ESG essentials
  • market opportunities
  • navigating finance
  • measuring natural capital.

Panel presentations were recorded and are available to watch online.

Keynote address: ESG and the global drivers that are reshaping Australian agriculture 

Catherine Marriott, OAM and 2024 Nuffield Scholar. 
Catherine discusses how environmental, social and governance (ESG) factors are changing Australian agriculture.

33:46

Natural Capital Conversations: Catherine Marriott - ESG and the global drivers that are reshaping Australian agriculture

Read transcript
Video transcript

Natural Capital Conversations: Catherine Marriott - ESG and the global drivers that are reshaping Australian agriculture

…And her keynote address is on ESG and the global drivers that are reshaping Australian agriculture.

Please put your hands together for Catherine Marriott.

The greatest danger in times of turbulence is not the turbulence itself, it's to act with yesterday's logic.

Now this is a quote by a guy called Peter Drucker, who was an Austrian, Australian, Austrian, American rather, management consultant and he specialises in modern management theory.

And I think that that's a really interesting way to open because what we're talking about fundamentally with natural capital and ESG is actually a change management piece.

So we can't keep thinking about our farming businesses the way that we have done so in the past.

And I've totally forgotten my phone so can somebody keep me on track? Because my watch is also flat.

Winning at life.

So how many of you have heard of the team ESG before? Raise your hand.

Okay, great.

How many of you could confidently define it? Me either.

No, just joking.

Hopefully we'll be able to...

In the next half an hour or so, hopefully I'll be able to lift your knowledge a little bit and also importantly give you a bit of a global perspective of some of the drivers that are leading into the change that we're needed.

Before I go any further at all, I would also like to pay my respects to the elders past and present and emerging of the Wiradjuri Nation, which we're lucky enough to be having as our conference venue today.

So my name is Catherine Marriott and I'd really love to thank Kate Jenkins particularly and also Local Land Services for leading an initiative like this.

I think it's really important that we start the conversation.

I'd also like to acknowledge Nutfield Australia for affording me the opportunity to complete a Nutfield scholarship and AgriFutures who are the sponsor.

Just a little shout out, Nutfield applications, applications are currently open.

So if any of you have an idea that you think might move the needle in Australian agribusiness, please come and have a yarn and I can talk you through the process and encourage you to apply.

Before I go too much further, I want to share with you, I'm not an ESG expert.

I am a Nutfield scholar who's halfway through my journey.

So I'm not going to provide you with a clear list of instructions of what you need to do to meet ESG requirements in the future because to be frank, the world is still trying to figure it out.

What is really important is I can share trends and what's actually happening to give you an idea to start thinking about what is important in your business and how you might start to collect data that's going to ensure that you maintain market access.

The countries that I've travelled to so far on my Nutfield is Africa, Europe, the UK, Brazil, the US, Japan and South Korea.

And I chose most of those countries because largely they are big trading nations.

I've learned that the ESG landscape is complex, it's a gendered, it's competing, it's opportunistic but it is also riddled with hope, opportunity and risk, which most change management pieces are.

There are so many competing aspects of ESG.

There's consumer demands versus practical reality on farm.

There's food security versus environmental preservation, environmental versus social outcomes, models level data versus individualistic investable data.

So how should we prioritise and proceed with these things? So what is ESG? ESG is a term that was coined in a 2004 UN report called Who Cares Wins.

And really the crux of where that came from is a whole heap of rich, I'm being crass here, but a whole heap of rich people that were wanting to invest in companies that they could feel good about not doing environmental damage or investing in slave labour.

So I'm not sure how that is going, but there seems to be an awful lot of fuss about it at the moment.

One of the guys that I met in South Korea, Yong-Sik-Ook, was a professor at Korea University and I think he said it the best.

He said, "Kathryn, ESG has two faces," or "ESG Investment has two faces." So it has the public face where people want to be seen to be investing in the right things, but the complexity lies with the fact that people and investors particularly also like making money.

And those two things can coexist, but it's complicated.

So the E stands for environment, and that includes things like carbon, natural capital, which is a big topic today, and it is a big focus on ESG, plastic usage, chemical and fertilisation usage, air quality, soil health, biodiversity, that sort of thing.

The S stands for social, and that is worrying about things like wages, diversity and inclusion, indigenous inclusion, health and safety, workplace health and safety of people.

And the G stands for governance.

So that's looking at the overarching business management.

So we're looking at risk, we're looking at transparency and data capture, we're looking at decision making, strategy, financial management, structures and legal requirements.

To further expand on this, let's start with the E.

So agriculture has a massive environmental footprint.

According to the OECD, ag accounts for 50% of land usage, 73% of global deforestation, 70% of water utilisation and 34% of global greenhouse gas emissions.

So we've got a bit of work to do.

Governments, investors, consumers and the public across the globe, particularly in wealthy nations, are responding to this by increasing their demand for sustainability credentials of our global food systems.

So some governments, including Australia, are considering mandatory adoption of reporting standards.

Now, this is particularly pertaining to climate risk and natural capital.

And a little wee heads up, it isn't mandatory to report against those metrics now, but it's coming.

And there's things like the global reporting index, the task force for nature-based, nature-related financial disclosures.

There's the international financial reporting scheme.

And I'm just sharing those with you.

Don't get tied up in the detail, but they're there and they're currently voluntary.

So it would be worthwhile having a bit of a look at those or speaking to the LLS staff and finding out what's available so that you're aware of and you can start thinking about and being proactive about what sort of data you may need to capture for your business.

Farmers have a direct impact on E.

So they can manage soils, crops, animals, water quality, biodiversity, et cetera.

Where farmers have less of a direct impact is on the S.

So that's things like community nutrition, hunger, discrimination and war, which is captured in the S pillar.

Quite often we hear people, I hear people say, "But Maz, what about..." Oh, sorry, my nickname is Maz.

"What about..." Fun fact.

Or Missy or Missile or any other million names that people call me.

So they, we get asked, "Why aren't we focused on the S?" And the reality of it is we're in a pretty wealthy country.

And so the S is kind of taken care of.

The S pertains to things like social and society outcomes.

So in Australia, we have minimum wages.

We have holidays and sick leave.

We have workplace health and safety legislation.

So all of that stuff is taken care of innately.

Juxtapose that, however, with countries like Africa, South Korea, Japan, Indonesia, and their governments have a huge focus on S.

They are trying to make sure that they've got access to clean water.

They're having access to enough nutrition, access to medicine.

And to them, those aspects are more important than caring for the environment.

It's not that they don't care for the environment.

It's just that they don't have the luxury of prioritising that like we do.

Now for the G, again, governance is largely taken care of in Australia or wealthy nations.

Companies' ability to manage risk, identify corruption and fraud, have access, like have legal business structures and that sort of thing, is all largely taken care of.

The G will become more prominent as these reporting standards are mandated globally.

There are three drivers that are driving ESG globally.

The first one is politics.

And politics is really focused on the general public.

So elected officials are going to go with where the public are asking them to go.

We all know that old story about social licence and the fact that you need the community to come on board with you.

And the role of activism plays a big part of that.

So politics is driven by what the general public want.

I'm not going to go too much further into it, but acknowledging that politics plays a really big role in the ESG conversation globally and is driving change.

But not as much as I first thought.

The second one is the commercial sector.

And this is largely driven by shareholders, consumers and the public.

Note, this is largely in wealthy nations where they, and to ignore this, can get us in a little bit of a pickle.

Investors don't understand practical realities of what's possible on farm.

So they don't really understand what's practically involved with going carbon neutral, for example.

As far as I can understand, it's the commercial sector that is really driving the need for ESG change.

And the third driver of why you might want to engage in the ESG space is for you guys as business people.

It sits in the opportunity boat.

So can we flip the need for ESG data on its head and say, well, how can this actually help me and run my business and focus on aspects of my business that perhaps I hadn't really thought of before? It forces you to think about aspects of your business which may have been a leaking little hole.

That, you know, when you're focused on productivity and profitability, you may not necessarily think of, but it's important for the long-term viability of your business.

So why did I get interested in ESG? I first came across the phase, I think, at an Australian Farm Institute conference about three years ago, and I thought, hmm, this is a post-farm gate thing that might start actually impacting people's businesses.

Now, why post-farm gate? Because I was working in the live export industry when a post-farm gate decision shut that industry down.

And I realised that farmers, or in that case, pastoralists, were busy running really effective businesses.

So they were looking after their cattle, looking after the environment, their workers, and a post-farm gate decision fundamentally impacted their trade.

It became really rigid, bureaucratic and expensive to operate in that business.

When I look at what's happening globally, I can see that there's similar things bubbling away in the ESG landscape that will fundamentally impact farmers without their input.

There's lots of movement globally around ESG principles, and it really relates to having non-tariff trade barriers put in place.

So non-tariff trade barriers really refers to an increase in red tape that unjustifiably restricts trade.

There are four main things that I wanted to achieve as part of my study.

The first one is to make sure that farmers are aware of the changes that are going on globally so they can proactively make decisions that are right for their businesses.

The second one is to understand what different countries are wanting so that as Australian farmers we can choose alternate markets if we need to, and if importing countries from a government perspective are going to get too rigid and hard to deal with.

And the third one is to inform RDCs and research and development corporations where they should be or could be investing their new R&D funding to make sure they're de-risking agriculture for you guys based on a contemporary view of what the world markets are looking for.

The fourth agenda I have is not so much related to farmers directly, but I've learned...we had a speech in Brazil actually by a guy called Wayne Dredge, and he's an Aussie fisherman, and he opened my eyes massively to how global policy is made.

And people sit in and around rooms in Rome at the UN and pontificate about what farmers need to be doing, with absolutely no regard for the practical realities of the implementation of what that actually means on farm.

And I don't have time to go into some of his stories, but it's horrifying the lack of knowledge at those global policy decision-making tables.

So let's talk about markets.

Now, why do we need to think about markets? Because we need to sell our produce, and in ag, typically, we don't think about our customer that much.

We're quite removed from how the end product is eaten.

So we put a primary product off the gate, and we don't really think about how it ends up in wheatbix.

Knowing what our customers want and thinking about the global priorities gives us time and scope to plan for what's coming down the line.

And for Australian farmers, this is particularly important because we export 72% of the produce that we produce.

So we export 78% of the beef, veal and mutton, for example.

We export 65% of canola, 67% of wheat.

So you can see that we do need to lift our eyes and have a look at what's happening globally so that we can make sure we're acting in a way that is conducive to maintain that market access.

Now, let's have a think about our major trading nations.

So governments that may be-- what governments might be expecting from an ESG perspective.

So remember I said politics was one of the major drivers.

I think, to be honest, Japan and South Korea really surprised the pants off me, but I'll run through the countries in a little while.

One of the biggest shifts that my travel gave me was are countries and our trading nations worried about animal welfare and natural capital and ESG, those sorts of things, or are they focused on food security, poverty reduction, sanitation, those sorts of things? And it's interesting when you actually start to have-- think about that from a systems perspective.

However, this is a big, however, by the way, where we think pressure is coming from is government, but actually where the pressure is coming from is the commercial entities that are driven by shareholders and customers.

So PepsiCo's, Cargill's, Nest's of the world.

They are owned and governed, essentially, by shareholders, and they are getting more and more-- the consumers are getting more discerning and they're getting more vocal about what's needed.

We also need to consider a domestic market.

So after travelling for 10 weeks around the world, I think Australia is really, really well placed, but we can't rest on our laurels.

So we've got things like MLA's carbon neutral 2030.

Now, that was the first agenda like that in the world, and Australia has managed to move the needle by about 50%, I think it's 57%, drop in methane emissions in beef since they set that target.

Now, the red meat industry and the manufacturing industry in Australia are the only ones that have significantly reduced their greenhouse gas emissions.

So that's something that we can be really, really proud of.

We also have sustainability frameworks.

There's lots of beef sustainability, sheep, grain sustainability frameworks, and they culminate in the Australian Sustainability Framework, and I think Katie McRobbitt's going to share with you a little bit more about that.

But travelling around the world, other countries are jealous of that because what that is, is it sort of-- it sets our light on the hill, if you like, and it's been done with government, farmers, and the commercial sector.

So it's a really collaborative approach, which I think we can all be really proud of.

However, we say that we can't rest on our laurels, and it's really important that you guys continue to engage with your RDCs to keep them investing in research that's going to impact you guys as businesses.

They love hearing from you, and they love the engagement.

Identify where your biggest industry challenges are.

So from a cropping perspective, it's your greenhouse gas emissions associated with fertilizer, and from the meat sector, it's your methane emissions.

We don't need to-- and this is a bit of a controversial thing-- but I don't think we need to go blindly down the EU path of reducing our fertilizers and reducing our chemicals and reducing our livestock, because I think in Australia, we've got capacity to be some of the most innovative people in the world, and we can actually come up with these solutions before it's a problem.

Do we need to always keep an eye on efficiency in environmental markets? Yes, but can we use science to actually work for farmers so that they can maintain their production while they're reducing their greenhouse gas emissions? And I firmly believe that we can.

We don't-- we've got some of the most innovative and forward-thinking agri-preneurs in the world, but we don't tell anyone.

And I love-- I went to a vocag earlier this year, and I listened to a lady called Olympia Yaga, and she's an amazing woman if anyone's ever come across her.

But she said, "You know, we need to be more proud and loud of what innovation and success we've got in ag in Australia." She said, "Instead of walking into a room and doing the Australian thing of, like, oh, yeah, no, it's no big deal.

We're not really that much of a big deal." Walk in and go, "Hi, I'm here.

You're welcome." And I just love the fact that she's like, "We need to be much more proud of what we're doing, because Australia, having traveled the world, is in a seriously leading position." Key to all of this, of course, is the commercialization of the research and it takes about seven years for us to get research to commercialization, and that's if it works really well.

So take the opportunity to meet with your RDCs, meet with the industry departments, to have a yarn to them about what's really important for your business.

Lisa is here today.

I think she's still on SAMRAC, South Australian Meat Research Council.

So go up and have yarns with people like that, because ultimately it's about long-proofing, future-proofing your businesses.

If the RDCs don't get ahead of it and create innovation to help us reduce our missions, the government is going to step in and do it for us, because the government, federally, has signed up to things like the Kyoto Protocol, the methane pledge, the Paris Agreement, those sorts of things.

So I said that I'd talk first about the drivers politically, and I'm just conscious of time, so I'm going to leave Africa out, but if anyone wants to talk to me about Africa, I'm really happy to yarn.

It was fascinating going to a developing country and seeing their priorities on ESG, and then it sort of got me reflecting - 10 minutes, thanks, Tal - it got me reflecting on, you know, we spent - we 200 years ago, 150 years ago - cleared all our country, and now we're telling developing countries you can't do that, but do we have a right to do that? Because now we've got knowledge that we didn't have when we did it, so it's a really complex thing to be thinking about.

The European Union is also really interesting.

The European Union is a leader, so they are a really good indicator.

Now, the rest of the world sort of follows through about 20 years later where the EU has started.

They have a highly subsidised agriculture system, because they're not profitable, but their government or the European Union recognises that they need farming.

They have things like the CAP - so the Common Agriculture Policy - for the first time, that is now tied to sustainability outcomes for their farmers.

They've also bought in - and that's all driven from a strategy that they've got called the Green Deal, which means that they want to be the first carbon neutral continent by 2050.

Now, there's other things that are being driven in the EU, like the deforestation legislation, which means that anyone who's cleared trees after 2020 no longer has access to the EU.

Now, that's interesting from a Brazilian perspective, because Brazil provides the EU with 44% of their soy and their corn.

So, if you think about that, where is the EU going to get their soy from? And therein lies the complexity with the ESG conversation, because people are wanting to do better, but the practical reality of how you're actually going to feed yourself is a very interesting piece.

The EU have got other initiatives like reducing their pesticides and their antimicrobials, so we call them antibiotics, in livestock production.

Now, have a think about what that's going to do to profitability and productivity.

They also have a goal of having 20% of their land mass organic.

Now, the question remains, are they going to enforce that on countries that they are importing from? They've just yet last week passed another legislation, which was called the Corporate Sustainability Due Diligence Directive, and that's looking at environment and human rights.

But all of those pieces of legislation are grossly watered down from where they started, and what I found interesting is that the EU parliament is being hammered by the not-for-profit sector because they're not actually doing enough.

So, what I learned in the EU is that they've got all these altruistic goals, but the detail in how they're actually going to implement them is lacking ore drastically watered down.

So, is this a sign of things to come? Now, remember I said that politics is fickle.

Speaking of elections and politics, half of the world's population is going to go to the polls issue, so nine out of ten major economies globally are going to the elections, and they're saying that there's going to be a large right-wing swing.

So, what impact is that going to have on ESG directives globally? Moving on to Brazil.

Brazil was the most extraordinary country.

I have never been to a country where I think they've got the balance of environment and production correct.

Brazil is not a subsidised country at all.

They spend a lot of money on innovation, research, that sort of thing.

Now, I was really surprised to learn that in the Amazon, if you own a farm in the Amazon, you are only allowed to clear 20% of it.

You've got to protect 80% of it.

Now, I think history we can leave at the door.

They've got new political system there in place, and they have to protect 80%.

So, if you've bought a farm in the Amazon, you're only allowed to use 20% of it.

In the Serrado region, you're only allowed to use 65% of it, and in the rest of Brazil, you're only allowed to clear 80% of it, and you've got to put back forest if it's been cleared in the past.

So, it's a massive understanding from Brazil of environmental impacts globally.

As I said before, 44% of the EU's soy goes into feeding livestock in the EU, so they are a big player, and I think, personally, like it was amazing driving around Matagrossa de Sol and seeing, like, soy and cornfields with rainforest belts right through the middle of them.

It's really, really extraordinary.

It was quite inspiring to see.

Moving on to America.

America's quite a wealthy nation, but they have a large, poor population.

So, they are focused on the E, but they are also really focused on the S, particularly around ensuring people have got enough to eat, as well as the undocumented residents.

Now, the dairy industry...

There's a big push saying that Trump's going to get rid of the undocumented residents if he gets in.

That's going to put the dairy industry in a real pickle because 60% of dairy workers are undocumented, but it's also going to have a rather large impact on his hotels and golf courses.

So, they have heavy farming subsidies.

One thing I learned in the States, which was fascinating, is that they have got this system.

So, they've got different federal and state politics, which is not in itself electrifying, but they have a system, which actually terrifies me, in that for state elections, they can have many referendums.

So, they're called ballots.

And recently, there's a ballot that's passed in California called Proposition 12.

And Proposition 12 speaks to, from memory, the size of cages that eggs, veal and pigs can farm in.

And so, when you go to vote for your Premier or whatever it's called in the state, Governor, there's also a question that says, "Do you think we should be treating animals with respect?" Yes.

Now, that has fundamentally changed because it passed, and it's fundamentally changed the way Californians can farm.

Interestingly, it doesn't actually impact California because there are no pigs, veal or pork or chooks in that state.

It does impact trade into that state.

And the same thing has happened in Massachusetts.

So, this is how we start to get a slight little leak through with externals having impact on the way that we farm.

Japan was fascinating.

I really went to Japan thinking that, as a large trading partner, they're going to lead us down a clean, green image piece.

I couldn't have been more wrong.

It was really interesting.

The government has a strategy called the Midori Strategy, which is largely focused on the EU.

You know, reduction of chemicals, reduction of fertilizers, 25% organic.

But their timeline is out to 2050, so they've got an extra 20 years.

When I said...

I also learned that Japan supplies 70% of their calories through food imports, so they're really food insecure.

So, I was thinking, "Oh, gosh, you know, Japan are going to be leading.

They will take anything." When I spoke to the government, they were like, "Oh, yes, clean green." Then I spoke to the commercial sector, and they were like, "I spoke to wine, wool, beef, dairy, horticulture, retail supply chains." And all of them said to be...

And I'm being...

I'm paraphrasing here, because Japanese people are really polite.

But basically, we don't give a toss about your environment or your animals.

We just want food.

And so, I think for a little while, we're going to still be able to compete to invest in Japan.

South Korea, again, is very, very similar to Japan.

They're interested in food safety and food costs.

The interesting thing with Korea is they're also interested in image.

So, Starbucks is a really big thing there, because they care about being seen walking around with a Starbucks cup.

Moving on to the commercial sector.

I think this is largely where...

So, the governments are going to be doing government stuff.

The commercial sector is what we really rely on, and they are the ones that are driving the change.

The commercial sector still faces a few headwinds.

And so, I think the main reason for this is that food and fibre companies need to keep manufacturing to fulfil demand.

So, they've got their goals, but they need product to actually keep their supply chains going.

So, whether the true believers like it or not, there aren't enough people in the world that can afford to be fussy about where their food comes from.

There also aren't enough farmers globally to supply the accurate data that the commercial sector needs, yet.

I want to be clear, I'm talking about listed companies, because that's where most of our product, our broad commodities, will end up.

What's driving all of this in the commercial sector? Well, fundamentally, it's investors.

So, investors want to be investing in companies that aren't doing any damage to the environment or people, et cetera.

The challenge with that is investors typically don't have an understanding of how food is produced.

Now, we're not Robinson Crusoe there.

Investors invest in banks without any understanding of how banks work.

They invest in electricity companies without any understanding of electricity.

But we've got a challenge because they're putting pressure on us to farm in a certain way while they're also putting pressure on the company to remain profitable.

Now, Woodside have recently seen this.

Last week, for the first time, shareholders rejected the Sustainability Report of Woodside.

So, the CEO and the Board of Directors now have a serious challenge because they've got to answer the shareholders' profitability drivers as well as the shareholders' environmental drivers.

I might just move through to...

One of the companies that I met, which was really interesting, it was a large agri-food business, so a large...

they make chips and all that sort of stuff.

And they've got a challenge to reduce their scope one and two emissions by 75% by 2030 and their scope three emissions by 40%.

And so, they're investing with farmers in practice change on farm.

They're also really interested in regenerative ag.

And they're doing that because that's what their consumers want.

So, I then said to this guy, "So, obviously, you're going to be preferentially buying from farmers that have reduced carbon numbers because then you can report your scope three emissions." And he said, "Look, Catherine, the complexity lies in the fact that we would really love to do that, and we will end up doing that over time.

So, it's important for you guys to keep measuring your data, but that we can't afford to at the moment because we don't have enough tucker to actually fulfil our supply chains.

So, the reality of it is the ESG thing is happening, and it's happening more slowly than I had thought, but let's be honest, I was like, panicked, going, "Holy moly, the farmers need to know what's going on here." So, it is happening.

It is important that we start to implement data capture mechanisms on farm.

If we don't get proactive and start leading this conversation, our government will do it for us, and we know that that never ends well.

The speed of change is impacted by the complexity of food security, international trade, war, and growing divergence between the haves and the have-nots in the world.

The ESG space is complex.

It's interconnected and it's real.

The commercial companies are the ones that are pushing mandates, so make sure you engage with your customers, you engage with your supply chain, you find out what it is that they are wanting, and it will be around natural capital, greenhouse gas emissions, your carbon budgets, and your biodiversity.

So, those are the things that you need to start thinking about, "How am I going to capture this?" It's really important that you start somewhere.

So, find an LLS staff member and speak to them and say, "How do I just get started?" Because if you don't start benchmarking now, you're going to find yourself left flat-footed, and the beautiful thing about finding out what's going on in the world is that we've got a lead time.

So, we can't keep running today's businesses using yesterday's tools.

Change is lumpy and it's uncomfortable, but it's inevitable.

And if we don't start changing now and capturing appropriate data on farm now to meet market demands, we're going to find that we're in a pickle because we're going to be dictated to by government.

I think that we have the smarts to lead this agenda globally, and I know that within the people here in the room with the local land services, with the consultants, and those sorts of things, really good hands to lead the change.

Thank you.

(Applause) We're so lucky to have Catherine take us around the world in 20 minutes.

Thank you so much for your presentation.

I just asked, how can people catch up with you, follow you? How can they engage more with hearing your insights, your global insights? Oh, gosh.

I'm on.

I hate social media so much.

But I've just started doing this little, like, video series on LinkedIn and Twitter and Instagram.

Instagram, I've got a stealth mode name, though.

It's Missy Mazzie.

Because I didn't want people to know who I was.

And then I got an uphill scholarship, and I was like, "I think I need to tell people stuff." So, anyway, but Catherine Marriott is my Twitter name and my LinkedIn name.

Also, I'll be here during Smoko and lunch, so come and have a yarn.

I'm really happy to talk with any of you.

I'm not an expert.

I don't understand about the reporting stuff.

That's not my strength.

But I can point you in the right direction, and I can answer any sort of global contextual questions that you have.

It's really hard compacting that into...

And, I mean, your narrative was wonderfully told.

I'm sure there's people sitting in the audience here today who are like, "God, I'd love to send that to my son, my auntie, my..." such and such.

Would you be open to LLS maybe publishing part of that in their newsletter? Sure.

You'll also realise that I got a bit excited at storytelling, and left half of it out.

So, really happy to share.

Well, the storytelling was the piece that I think a lot of people will remember from here, and what's happening in Brazil and what's happening in Asia.

These are big, big movements.

And if we have our...

If someone has their eyes around the world, thanks to the Nutfield Scholarship, thanks to you, and relay that information back, which I think is the purpose of the Nuffield Scholarship.

Yeah.

No, really happy to share and help in any way that I can.

Great.

Fantastic.

Well, there you go.

I'm sure Kate will be on to you after this for your speech notes and what's allowed to be shared at the midpoint of your Nuffield Scholarship, and good luck with the rest of it.

Thank you.

Thank you so much.

[APPLAUSE] As Catherine said, it is Smoko time.

We have until 10.45.

We'll give you a round up at 10.40 to come back into the room.

At 10.45, we're back here.

Morning tea, straight out the door, turn right and head down and enjoy yourself.

Make sure you meet a few new people and make connections.

Thank you.

[ENDS]

 

Environmental market opportunities

Our speakers delve into environmental markets, biodiversity stewardship, payments and credits, and carbon advice, trends and industry insights.

Natural Capital Conversations: Biodiversity agreements, opportunities, commitments & obligations LLS

Cassie Douglas, Regional Conservation Officer, Murray Riverina

10:09

Natural Capital Conversation: Role of the credits supply task force & NSW biodiversity credit market LLS

John Seidal - Credit Supply Taskforce

11:16

Natural Capital Conversations: Environmental Markets Biodiversity Payments

15:21

Natural Capital Conversations: Q&A with the panel Jillian Kilby w/ Meaghan Burkett, John Seidel....

15:13

Natural Capital Conversations: Landholder experience, Biodiversity stewardship agreement on Woodpark

10:37

Natural Capital Conversations: C&B pilot; registering for ACCUs, benefits and challenges.

10:33

Natural Capital Conversations: Environmental markets carbon. PIPAP carbon and biodiversity program.

6:43

Environmental markets: Carbon - Panel Q&A session.

9:32

Natural Capital Conversations: Biodiversity agreements, opportunities, commitments & obligations LLS

Cassie Douglas, Regional Conservation Officer, Murray Riverina

Video transcript

Natural Capital Conversations: Biodiversity agreements, opportunities, commitments & obligations LLS

We offer a high integrity option for natural capital.

So how are we able to do that? We are established under the Biodiversity Conservation Trust Act as part of the 2017 National Native Edge Reforms to offer long-term imperpetuity, untitled agreements and protection for vegetation or biodiversity.

We are all about private land conservation, so we only work with private land holders.

So we are focused specifically on private land, essentially, and supporting you to do what you're often already doing.

We are prioritising, we prioritise our investment.

We have a very complex way of doing that, but if you were to look at the map of how we prioritise our investment, you would see that it is very highly focused on the sheep wheat belt of New South Wales and then the areas to either side of that as a priority area.

We do tend to target specific conservation values that we might be looking for, so species or particular ecosystems that we're looking to protect where they're particularly at threat, but we are very prioritised.

You can read that on our website.

We do have an investment strategy if you're interested in seeing where we have invested money and where we are intending to invest money into the future.

Our agreements are all long-term.

Majority of them are in perpetuity and untitled, so they go from you as the current land holder to the next land holder and the next land holder.

We offer financial support for quite a number of our agreements, which I'll talk about in a moment, and we offer land holder and ecological support.

My role within our team is to support land holders to enter into agreements with us or even start the conversation.

Is it an appropriate option for you in this space? Go through that process with you helping you to develop an agreement that will work for you and your property and your farm business.

Then once you're signed up, particularly if you have financial support, you will see me every year.

This is not a sign up and then we walk away and we let you do your thing.

We are there as part of that agreement helping you to management adapting as times change, conditions change, and as you might find that we were targeting St John's Ward at the start of your agreement and you got on top of it.

Then we might start to look at funneling some of those funds that you have into another priority area in your agreement.

We also offer ecological support.

Part of our team, we have a number of ecologists on the team.

We do have our own monitoring program.

We are out there monitoring change over time on agreements to see that what we're doing, how we're managing, is actually having the desired outcome.

It is a really high integrity program that we offer.

It's an accredited monitoring system that we use.

I think it's outlined in the notes.

Definitely, if it's something you're interested in, we would love to chat with you about it.

We have quite a network, as you can see already, across the state.

That network is continuing to grow.

I think those figures were from August last year.

We have since had a number of programs since then and signed quite a few new agreements with significant thousands more hectares added to what you see there.

A program overview.

I might start, which is a bit odd, I'm going to start on the far right.

I'm actually not going to talk about the Biodiversity Offsets Program because the credit supply task force is here somewhere and John's going to talk about it.

Yes.

Revolving fund, that really is great for you to know that it's out there if you're looking to sell your property and you know you have a fantastic conservation asset on it and you think we might be interested.

We do actually purchase properties, put conservation agreements on them and then sell them on with that agreement in place.

Definitely something to keep in mind if property sale is something you might be considering in the near future.

Our two main streams that we have available in this region are the Conservation Partners Program which is our voluntary stream.

It's no annual payments associated with that but you do have access to grants under that.

That starts at a 20 hectare minimum for any vegetation type essentially.

Then we go into our funded stream which is our Conservation Management Program and our two main offerings in those areas are Conservation Tenders which is a reverse auction style participation process and the Fixed Price Offer Program which we have available every year or year.

We are currently assessing for Fixed Price Offer 8.

We're doing field work at the moment and we have Fixed Price Offer 9 open.

The Fixed Price Offer Program is a dollar per hectare per annum rate.

We set the figure based on land values and your local government area.

Then we talk with you essentially about what we can manage.

We generally start with fencing, track maintenance, weeds, pest control.

Some very basic actions that you're probably already doing on your farm.

We could put in a new fence as part of that agreement.

We would be reducing grazing generally.

We do have grazing allowances depending on the vegetation type or stock exclusion.

It just depends.

Conservation tenders, I'm going to talk about an example one in a moment but essentially a reverse auction.

We are looking to target very high priority areas or species.

We then ask landholders in a specific area to tell us what will it cost you to manage it.

We work out value for money essentially.

The cost of your bid versus the biodiversity value of your site.

We fund to a point where we no longer consider it to be value for money.

That's very variable.

It depends on who else is in the tender with you as to what is considered value for money.

It's a really great process to be a part of I think.

We've secured some beautiful conservation assets and have some amazing landholders in our network as a result of those programs.

You can see on the bottom there the cultural biodiversity pilot offer very similar to fixed price offer but targeted at indigenous landowners.

We have closed the AOIs for that now.

We are piloting it in this region and we'll be starting assessment for that very shortly.

Watch this space if you do know some indigenous land managers that might be interested.

Get them to get in touch with us because we're hoping that it will be successful and we'll be able to roll it out across the state.

Very quickly, here's an example of a conservation tender that we ran recently.

We are currently in the process of, we're almost at signing of agreements for this tender now.

It's a trial to pilot biodiversity plus carbon partnered with the Clean Energy Regulator as part of their environmental plantings project.

This was a great way for us to be able to support really high integrity biodiversity claims in a carbon area.

Landholders generate the carbon credits and are able to either use them on farm for carbon neutrality or sell them into the carbon market if they so choose.

We targeted, very targeted at threatened ecological communities in highly fragmented landscapes.

That was from east of Holbrook to about Deniliquan.

We actually had a five hectare minimum on remnants in that area because we were targeting box gum, woodlands and inland grey box which as you know if you've been for a drive through that area, they're in very small patches and don't often meet that 20 hectare minimum that we start with for TEC.

What does that actually look like? This is an example of what that might have looked like.

We have the larger conservation area and then the carbon planting sits within that conservation area to expand that area.

The idea here was that we would then, once the carbon permanence period ended at 100 years, the conservation agreement sits over the top of that and it recognises that those carbon plantings actually have quite a lot of biodiversity significance at the 100 year mark.

They've been there for 100 years.

They've become habitat.

That's then offering protection to those areas post the carbon project ending I suppose.

Again, that includes funded management activities for site establishment and annual management of the remnant area.

Also once the carbon reaches that 100 year mark, there's payments to support managing that as a biodiversity area as well.

Thank you very much.

I'm going to wrap up.

If you have any questions, please come and chat with Matt and I at the track trade store.

We'd love to chat with you.

There are a few land holders in the room too if you'd like to chat to someone in the network who's had a go at it.

Thank you so much Cassie.

So many great examples of how land managers can be involved.

As Cassie said, they have a trade store over where you'll have lunch and she'll be here all day to continue these conversations.

Cassie will also join us up here on the panel in about 20 minutes.

So if you have questions, please do save.

[ENDS]  

Navigating finance and natural capital

Alanna Barrett from ANZ Bank, Nicole Yazbek-Martin from the Australian Sustainable Finance Institute and Natasha Greenwood from the Commonwealth Bank talk about natural capital, profit and risk in this panel session. 

39:52

Natural Capital Conversations: Navigating Finance panel discussion

Read transcript
Video transcript

Natural Capital Conversations: Navigating Finance panel discussion

Hi, Natasha and hi, Nicole.

We're just gathering people back in the room.

I can see that you can see the room.

Fantastic.

Good afternoon, everyone, and welcome back.

We'll get back into the natural capital conversations, and this afternoon we've got a panel session for the next 35 minutes on local financial institutions and financing natural capital.

We're very lucky to be joined both in person and online by experts in this area.

Joining us in person, please welcome Alana Barrett.

She's the Associate Director of Agribusiness Research for ANZ, and she joins us in person.

Meanwhile, online, we have Nicole Yazbeck-Martin.

She's the Head of Taxonomy and Natural Capital for the Australian Sustainable Finance Institute.

Nicole, if you can give us a wave so everyone knows you're in the white shirt, and Natasha Greenwood, who's also joining us online.

She's the General Manager for Agribusiness at Commonwealth Bank, and if you could give us a wave, fantastic.

I'll join you on the panel, Alana, and we can get started.

Oh, no, no, no, there we go.

Fantastic.

So we'll do a quick tech check.

Nicole, I'd love to hear from you, your background, in a minute.

All right, thank you.

I'm assuming everyone can hear me.

Thank you very much for inviting me.

It's lovely to join you all virtually.

So I head up the work program at the Australian Sustainable Finance Institute, working in a partnership with the Australian government, developing a sustainable finance taxonomy, which really, in essence, is just a classification system, which classifies economic activities across the economy, including agriculture, to classifies them according to their sustainability attributes.

And the purpose and drive behind developing a taxonomy is to ensure that we're all talking more or less about the same things and concepts as we as we seek to channel more private capital into sustainable outcomes, including natural capital.

I also work very closely on our natural capital work program.

And as part of that work, and I believe you will be talking with Sue Ogilvie later this afternoon, we work in partnership with Farming for the Future to really look, I guess, at the bottom end, which is how good natural capital practices lead to productive and resilience outcomes for, obviously, for the farming community.

And then really the value that that also helps to create for financiers, banks and investors so that they can structure their products and services accordingly to really promote and work in partnership with farmers to drive those outcomes.

Fantastic.

Thank you so much, Nicole.

The sounds really good in the room.

We can hear you well and welcome Natasha.

We'd love to hear your background as well.

Yeah, good afternoon, everybody.

And it is terrific to be able to join you today.

I'm dialing in from Adelaide, but you never have to twist my arm too far to have a conversation about natural capital and the opportunities in transition.

I've been with CBA for over 30 years now.

My role within CBA today is to head up the agribusiness portfolio and to create and execute on our agribusiness strategy so that we've got the tools, the products, the services, as well as the capabilities to be really able to support our customers in their ambitions and goals for their farming enterprises.

And of course, today, a lot of that looks like the transition to lower carbon, rebuilding natural landscapes and working with producers so that they can maximise the opportunities as we move towards lower carbon and nature positive.

But that we also manage those risks.

So delighted to be with you all today.

And I know you'll have lots of questions and hopefully we can share some really valuable insights.

Thanks so much, Natasha.

And over to you, Alana, you're the associate director of agribusiness research at ANZ.

Yes, whatever that means, Jill.

So I work across the national agri portfolio, but I'm actually based here in Wagga.

So I haven't travelled too far today, but my husband and I farm down at Mangoplah south of Wagga.

And I work for ANZ in a capacity that I'm looking at industry issues that affect our portfolio nationally.

And I'm sort of absorbing that information, reporting back both through our internal structures, to executives and our board, but also to the market.

So I do a bit of work with the media around commodities and price movements and that type of thing as well.

So a bit of a jack of all trades master of none, but I will see how I go on today's panel.

Alana, let's start with an overall view of natural capital and how the finance sector is involved.

How are they engaging in sustainable land and natural resource management by farmers? And I think it's really interesting coming from you because you're local, you're here, but you're also in a very senior role with the bank.

So please do share with us.

Absolutely.

Thanks, Jill.

So I think if we consider the way that banks are involved with farmers in the way that we lend money, you could say that we've been financing natural capital and sustainable agriculture for the entire time that we've been financing farming.

And for most Australian banks, that's nearly a couple of hundred years now.

And why I say that in some context to that is that as a banker in a really privileged position, and so all of these agribusiness managers, no matter what colour shirt they wear, are driving around Australia, going onto farms and getting a physical look at the way that you as a farmer manages your natural capital.

So they're looking at the way you manage your land, your water, your plants, your animals, your people, your infrastructure.

They're getting a view of all of this and they're taking that on board.

Then they're coupling that with your financial performance, both historical and looking forward.

They're sometimes getting a view into your business over a 30 or 40 or longer year period for customers that have been around for that long.

So it's certainly a position of privilege.

And what we anecdotally in banking have learnt is that there is a clear link between responsible natural resource management, natural capital management, the way you manage all of those things I've just mentioned, and your long term viability, profitability, sustainability.

And that's a really broad word.

I don't like to use it too much.

So I think you can consider that banks already understand quite well a lot of the things that we talk about when we talk about natural capital management, but and already consider them and we consider them then as, I guess, measuring how risky lending money to your business is perceived to be.

And so in a way, good natural capital management is already incentivised through the risk profile of your business as you present yourself to your bank.

But we're moving now, I think, and we'll flesh this out, I'm sure, through this session to a phase where all of these environmental credentials and all the things we've talked about so far today are becoming more formalised.

They're becoming more marketable and more real in a way that banks can now start to get involved in incentivising and speeding up that transition and helping you on that journey.

So I think what I'm hearing is when you see a landholder coming to you with ways to increase their natural capital in ways that they wish to improve their landholding, you're looking at them as a good customer.

I think it just all forms part of the overall view of you as a farmer and the more information that you can present to your bank around the way that you farm, the better off you're going to be in that relationship.

And Natasha, I can see you nodding along in agreement.

How do you see the industry evolving? Well, I think firstly, if I start with a few first principles, that might be helpful for everybody there.

So we see the transition to lower carbon and nature positive as presenting enormous opportunities for agriculture and opportunities for producers to be able to optimise both productivity, profitability and demonstrate their sustainability credentials.

And so the conversation that we have with many of our customers is around how do we make sure that we're supporting our customers extract both economic value as well as positive environmental outcomes.

So the work that we do focuses very much on working with producers to optimise the opportunities and to manage the risks, to demonstrate the economic value as well as the environmental value.

I think the second first principle or the second principle that we really operate under is understanding that every producer is starting from a different point in time, that every producer will have different capacity as well as different capability to be able to undertake transitional farming activities.

And that when we talk about the transition to net zero or the transition to nature positive, we tend to talk in aggregate.

So we're talking about the portfolio or we're talking about the sector, recognising that each individual farm will have different opportunities and different activities that they can undertake to transition.

Our role as a bank is really to support producers in whatever their goals are on their farm because they'll all be different.

But very much around ensuring that we've got a very comprehensive suite of green financing solutions to incentivise those producers that are ready to make that investment in farm practices that have environmental outcomes.

So that might be either reducing emissions, avoiding emissions or rebuilding natural landscapes and working with producers around services that can actually help them get started.

So I can talk a little bit about that later today as well.

And Natasha, are there any trends or drivers you're seeing internationally or nationally that you think might change the finance sector? Look, certainly, and I know Nicole will talk a little bit about this as well, but we're definitely starting to see mobilisation by supply chain, by banks, by industry, by producers and of course by consumers as well.

So I used to talk about saying that the conversation was shifting.

I now talk about saying that the conversation is accelerated and the conversation has shifted.

So we're finding that many of our customers today have a very good understanding of why transition to lower carbon and transition to nature positive is important.

They're now actually more interested in what does that mean for me? How do I get started and what might be some steps that I could take for my farm? But certainly we're seeing supply chain wanting to collaborate with banks and with industry to make sure that we're simplifying things for producers so that producers aren't going to be asked to do something for banks that's different to their supply chain that's different for their industry.

And we're starting to see all of these things come together and obviously underpinned by the work that federal, state and local governments are doing as well.

So I know Nicole might add to that, but certainly I really talk about it now.

It's mobilisation phase.

I can see Nicole nodding along here.

Nicole, you're in a role with the Australian Sustainable Finance Institute.

What trends or drivers are you seeing internationally or nationally that may change how the finance sector incentivises sustainable land and natural resource management? What are you seeing? Yeah, so I mean, I absolutely agree with everything Natasha said.

And I think we were actually in that phase of now doing the hard yards of making it happen and really, I guess, what are the what are the what are the supporting architectural pieces from a financial policy point of view that will really help to accelerate that capital in a way that, like Natasha says, does not have adverse outcomes.

That's done efficiently where everybody is joined up and we're all kind of pushing in the same direction.

So the key drivers, I think, is a really strong recognition, not only obviously that we we need to get a handle and start to drive down our emissions as as as a globe, because if not, we are going to be living in a world.

Thank you for us to bomb and do everything, but also that nature is an important part of that.

So that so that interconnection, the two sides of the coin, as people like to talk about it, both from a risk perspective, but an opportunity perspective are now deeply embedded in financial thinking.

And now it's a matter of how we make that happen.

And so part of the work that we're doing around is supporting financial institutions, supporting others along the supply chain, making sure that we're all coordinated to be what are the important things that we all care about? What are the key pieces of underpinning, I guess, reporting and structures that we need to put in place to ensure that we're doing things in a robust way, that we're doing things transparently, but that it also works on the ground and we're actually driving real world outcomes.

And so things like taxonomies and disclosures and and all the things that we're collectively trying to do, we need to ensure that they actually deliver on those outcomes and channel capital to where we want to get it to.

Thank you, Nicole.

And I'll just let the audience know we have 20 minutes remaining of this panel session and we are happy to take questions from you.

A question for Natasha and Alana, perhaps to you first, Alana, what's an example of a time you've recently assisted a land holder to navigate the financial.

Thanks, Jill.

So not me personally, but lots of examples through ANZ partnership with Kefic, it's the Clean Energy Finance Corporation, where we finance the upgrade, excuse me, the upgrade of on-farm equipment and infrastructure to more energy efficient, lower emission, diesel to solar, things like that, that are simple, structured, easily achievable targets to both measure and structure.

And so we're going to be talking about the digital structure into finance over time.

And so diesel pumps on a big irrigation system recently, a simple transition to solar.

So it doesn't have to be complex and difficult.

We can access green finance for traditional things like financing attractor.

And what does green financing mean? Is it a percent lower? Is it cheaper to faster to.

True.

Yeah, that's a very good point.

Thanks, Jill.

So when we're talking about green finance, and we do have to be really careful about the way that we use that term because the banks and anyone in the industry has to measure up to that and be able to prove that what we're calling green is actually green.

Otherwise, there are some very serious ramifications.

So in this case, you're talking about a quite significant discount of half a percent of the interest rate on the amount.

I noticed that the port of Newcastle that trades coal got a higher interest rate for their loans because they're dealing in coal, but it was like 2% higher.

Do you think you and Natasha could go 2% lower? Tricky, Jill.

Natasha.

You know, I think certainly the opportunity is to incentivise producers.

So we very much want to demonstrate firstly our commitment to a successful thriving dynamic sector and then to create the framework so that producers actually want to invest in these activities.

So I think certainly, Alana, you've highlighted a really good example there in relation to renewables.

But we're certainly seeing customers interested in activities that might be around soil rehydration, might be around precision application of chemicals or precision irrigation.

The tree plantings, it might be around energy usage, such as renewables, might be around remediating or soil erosion activities, all of those sorts of things.

So we were very proud to bring to Australia, Australia's first agri-green loan, which is specifically designed to assist farmers finance those activities.

And activities that either avoid or reduce emissions on farm have the ability to qualify for an agri-green loan and there is a material discount.

So depending on the amount borrowed and the overall risk profile, but certainly it's at a substantial discount to what we would normally provide so that it helps manage the economic cost of investing in those activities.

A really good example is a customer of ours in Queensland, very large land holding over 90,000 hectares in Queensland, wanted to implement activities that would help with soil rehydration, very low rainfall area.

So they installed spreader banks to slow the flow of water across the property and to be able to harvest more rainfall.

They also did a one-off compaction arrangement to assist with rainfall harvest across the property and they implemented rotational grazing with multi-species pasture cover to rebuild soil health.

In addition to that, they were able to register a soil carbon project.

So we were able to finance all of those activities via an agri-green loan to support that farm.

And what we've been able to do since then is not just have the agri-green loan available to support the capital expenditure that's required for those activities, but the next question that we get from customers is quite often, so how do I know which activities I should undertake on my farm and that suit my business? And so we really talk that the very first step in that is measurement, is baseline measurement.

So understand the economics of your farm, understand where your baseline is and then think about how you might model or consider which abatement options are relevant for your business.

So in February and March this year, we undertook a pilot program with Emissions Measurement Platform, Ruminati.

And many of you in the room might be familiar with Ruminati.

They're actually a riverina-based organization.

Bobby Miller from your neck of the woods developed Ruminati and we gave 50 of our customers the opportunity to use the Ruminati Prime platform to be able to firstly measure their own baseline.

Secondly, though, then to model those abatement options, which they may want to consider on their farm.

So the most popular abatement options that were modeled by our pilot customers were past-year management opportunities and also herd or livestock management opportunities.

So specifically, what would happen to my Emissions profile if I applied less urea, less lime, less super? What might happen if I adjusted my stocking rates? Or what might happen if I implemented multi-species pasture cover or rotational grazing? And so this is what's really moving customers or producers to shift from being deeply curious, but somewhat confused towards intending to do something because they understand more towards actually being able or feeling empowered to take action because they've got the information and they've got the finance that they need.

Natasha, such great examples of how customers are using specific financial products.

Alana, before I throw to you and ask what sort of products you're seeing people using and Nicole as well if you're seeing products that people are using.

Natasha, we had a question come in through.

Menti, will clients who don't know their Emissions or their baseline be charged higher interest rates in the future? Yeah, look, it's a really good question because this is this level of curiosity and concern.

You know, what is my supply chain going to expect? What is my bank going to expect? You know, when people talk about transition, how's that going to impact me in my business? That's a great question.

So thank you.

And our position at CBA is going back to we think there are enormous opportunities.

We want to support producers with those opportunities, but we recognize every farm will be different.

So we want to make sure that each farm has the information that they need or each of our customers has the information that they need and we want to support them with their own goals.

So for each farm, that will be different.

We're very much operating on we want to incentivize producers to think about the activities that they may undertake.

And we recognize that food security is a really important aspect here.

The reason I'm so passionate about talking about natural capital and lower carbon is because Ag is at the pointy end of solving or contributing to three really complex global problems.

How do we grow more to feed and clothe a growing global population? How do we emit less and sequester more carbon and how do we rebuild natural landscapes? So we're very much on supporting producers to do that, not penalizing them.

Absolutely.

Alana, what are you seeing in the way of these products rolling out in this area? I'll just firstly, I think Mira, what Natasha has said around the banks role there to incentivize and encourage that transition as opposed to penalize or enforce or even prescribe.

So I think it's actually really pleasing when we get all the banks together in a room on this that everyone is actually very aligned in their view, which is I think just good for everyone to know because there is that level of underlying concern.

In terms of products, so what I've mentioned in terms of our partnership with the Clean Energy Finance Corporation, also a product which we call a sustainability linked loan.

We like the government have lots of acronyms, SLL, and that's where we're linking specific environmental outcomes on farm to something that has to be reported and checked off to say, yes, we did achieve that outcome at X period of time.

That comes with a varying discount depending on what exactly that activity is, the level of finance, the level of risk, all of that as well.

Are there any questions in the room? I know Kate's got, we've got two here.

We might get the microphones over to you.

While we wait for that, I've got a question here.

We heard earlier that getting bank approval to do a carbon project on a property with a mortgage was a challenge.

Banks looking to remove some of these practical constraints.

Alana? Yeah, I'm happy to take that one, Jill.

I think we've been on a journey with industry with all of this.

The concept of, okay, you're an interest holder in this land, we have a mortgage, can you just approve this so we can get on with it? It all sounds so simple.

In a big organisation like Australia's big banks, these things take time and we're on a journey.

I think and I would hope that you would find that at least all the big banks have really gotten their skates on with most of that process side of things now.

It's certainly been an area of focus to make sure that we're not hindering because we certainly don't want to be in a position of slowing progress through our own red tape.

Just another question that's coming in.

What scale are these loans? Is it mainly larger farms that are investing? Are they scaled down? Great question because often a lot of the work that you're doing on farm to enhance your natural capital is incremental.

It's little bits over time.

You're planting trees this year, you're changing your perennial pasture system next, you're fencing out of our parion zone the next.

Often they're not material amounts of money that you would need to go and seek a particular green finance product for.

That's where I go back to where we started, which is we need to make sure where you can help yourself in that situation is making sure your bank understands all of that that you were doing on farm.

The more data you can capture to prove that benefit through the help of everyone that we've heard from so far today, the better off that conversation will be with the bank who can then understand what you're doing on farm and how that's lowering your risk and your chances of success into the future.

Thanks, Alana.

Over to the floor.

We have a question up from.

Thanks.

Look, I guess the bank saw that the impact of when water licenses were decoupled from property and how when a water license was sold by a property owner, how dramatically that devalued the property.

I'm just wondering if you've got any concerns about farmers selling off their carbon to a third party and how that will impact the value of their property.

Yeah, I can pick that one up if you like.

Go for it.

It's another really good question.

I mean, carbon, we could have a one hour conversation just about carbon.

It's a really complex area.

I think firstly, again, if you sort of start with first principles, we recognize that farmers have a choice and that some farmers will choose to inset.

So they'll choose to keep their own carbon credits for the purposes of demonstrating their own sustainability credentials.

Other producers will choose to offset and diversify their income by selling their carbon credits.

And some producers will choose to do both.

They will inset first and then they will offset once they've been able to achieve a position where they've got surplus credits.

The carbon market in Australia is probably one of the higher integrity carbon markets globally.

We've got a very good regulator in the clean energy regulator.

We've also got excellent resources available and some very, very, very well thought through methodologies.

Today, we have the ability to be able to finance carbon projects either through traditional forms of finance like the Agri Green Line, which I was talking about earlier.

But we're also exploring new ways to be able to finance carbon projects.

And last year we financed our first carbon pre-finance transaction.

So this was for a cattle station in WA where they wanted to use the future value of their Australian carbon credits to actually finance the carbon project itself.

And we financed up to 50% of the future value of the carbon credits.

So I think from our investment in that sort of transaction, you can see the confidence that we have in the carbon market and the important role that it's going to play in Australia's transition.

And the important role that producers will play on the supply side of that transition.

The other aspect around carbon that you asked was around valuations.

So today there are accredited valuers that can confidently produce to your bank a valuation that's both as is and also with a carbon project.

And there are some fairly clear guidelines around standards for that.

I think all of the banks are evolving their thinking around how they will treat that in the future and what lending margins they will apply to properties that have got carbon credits attached.

But I think hopefully you've heard through this session today that we're really moving towards supporting producers who want to engage in carbon projects and to provide the incentives that we can to make that possible, both through finance, but also in the way that we actually treat the valuations and treat the projects themselves as well as the carbon credits.

Thanks to Natasha.

We've got a question up the front here and we've got about eight minutes left on this panel.

So up until that last question, the financing that have been spoken about was mostly about like really tangible outcomes.

And yeah, a bit like that.

I was just wondering about like the bank's appetite to fund things, not so much in the carbon side, but the biodiversity side where to enter into these BSA agreements.

There's actually like huge upfront costs, but that would obviously be quite a risk to the bank.

Yeah, there's no guarantee at the end.

But what's the bank's appetite, I guess, for lending money for things like that? Yeah, I can take that.

And does that fit under creating finance? I think we need to just, I guess, take a step back and remember that we have a responsibility to you as the customer to make sure that we don't finance you into something that is not financially viable.

You know, we've all been through the Royal Commission and everything that that uncovered.

And so we do have a responsibility to make sure that we are comfortable with whatever it is that is being proposed, whether that's about diversity project, whether that's buying the farm next door, whatever that may be.

So sometimes when there's these unknown outcomes, it can be tricky because it's really great.

But that's why I asked the question earlier this morning of the panel, who is up here around, is there help available to farmers to work out that balance between what are the upfront costs of going into a particular project or a scheme? What's that going to do to my revenue and productivity and getting all of that information together? So that one, that they understand it and can make an informed decision, but two, so that we can understand that as well.

So it's really, again, going to come down to the data that you can present and the information and the story that makes that a safe investment for you and for your bank.

Because at the end of the day, as I said, no one wants to set a business up into something that that doesn't work.

Any other questions from the floor? I can see Lisa.

Yeah, just to follow up the security, I guess, of the finance that you're offering, like you've got your sustainable linked loans.

Natasha, you spoke about the carbon project in WA.

That obviously is a longer term one.

Like, is it all related to the length of time that loan is? And I assume the green finance is more equipment loan, too.

So I just wanted to know how you handle that security and what that security is.

Is it the land or? Yeah, look, what we're really trying to design with our suite of sustainable financing options is to meet a range of different needs.

So in relation to the agri green loan, I describe that as being really well suited to a producer who wants to undertake capex on farm for a new activity that's going to lower or avoid emissions.

That's structured really as a standard.

If you think of it similar to a standard term loan, but with the discount applied to incentivise the sustainable activity or sustaining farming practice, the equipment finance would really be for the purchase of plant and equipment that has an eligible or that is eligible under that criteria.

So usually there's a green component to that plant and equipment.

So whether it's a sprayer, whether it's a tractor, whatever it is, there would be an eligibility component there.

But that is linked from a security point of view, that is linked to that plant and equipment for the agri green line.

It would normally be linked to the farm property where it's a carbon project and people don't want to link it to either.

So they want to be able to rest on the value of the future carbon credits.

That's where we might consider a pre-financer carbon credits to be able to do that because that's not linked to either the farm property or the assets of the farm other than the GSI, which is the assets of the business, the general security interest.

Thanks for that question, Lisa.

As we just look for questions in the room, I'll just ask Nicole, is there anything that you've heard that you would like to add to or make a contribution to? No, I mean, I think it's been really great to sit here, you know, practically on the ground how some of the things that we're working on at the systems level really translate through to enhancing the suite of sustainable finance products that we can offer.

And like Natasha said, giving people the choice to be able to pick these things and making it easy to actually shift that management practice.

I think the one thing that I would just confirm and reiterate around, you know, banks really seeking to come together collectively at a systems level to really kind of drive those incentives and outcomes is, you know, in the work that we're doing on the natural capital advisory group that we hold.

We have, you know, CBA's on there, ANZ's on there.

Actually, all of Australia's major agri lenders are on there.

We're meeting every two months to kind of really deep dive into what natural capital means, how it drives profitability and resilience outcomes, all with the purpose of being able to increase that understanding and be able to provide those products and services.

So I do really think that, you know, this is a case where people really all see that mutual benefit and I'm already trying to drive that in the right way.

Nicole, one of the questions that came in is it says profit margins are tight with the rising cost of production in many agricultural enterprises.

How can we strike the balance between allowing farmers to capture meaningful information rather than just the compliance data? Is that something that they could bring to your organisation? This is the crux of what we're really trying to do, both in terms of the natural capital advisory committee program of work is what are the key things that we care about that we actually need to know that's both in the interest of the banks and the finance sector from a risk and opportunity perspective that are also in the interest of the farmer from a productivity resilience and opportunity perspective.

So that to what and to what extent is the information that the farmer will be collecting is also in his or her benefits themselves because it drives production on the ground.

Can we ensure that that is done in a way that is consistent and then who else is in the value chain that is also going to be asking for that information that let's ensure that we're asking for it in the same way.

So we want to create that efficiency in terms of reporting and information that is not a compliance burden but it's actually a production outcome.

It actually has a production outcome effect on it as well.

And this is where the link between emissions reduction and increase in things like small carbon to the extent that it has a productivity driver, you know, the farmer should be collecting that for their own management actions.

How can we make it simple that they're collecting that that that's also reported up in a format with that be.

But then I do think if there is the regulatory system does demand things over and above that then I think there is an equity question around who should be paying like who is the beneficiary of that and who should be paying and how that should be spread.

And I think this is where absolutely engaging with government and regulators and everyone along the supply chain to ensure that that burden is shared equitably is something as an ongoing conversation.

I think something that we need to continue to raise and have that that discussion.

OK, we've reached time.

Nicole, this is a quick question.

Noting that agriculture has been named as a priority sector for development of the taxonomy but not in is not in the first three under development.

How far off do you think it is? It's a great plug.

Your eyes went out yesterday.

So that's our expression of interest for people to join our technical advisory groups to be part of helping to shape the criteria for the taxonomy for the agricultural sector.

So if you haven't seen that, please jump onto ASVI's website or any of the social media things.

And we really encourage people from a diverse range of backgrounds and skills to apply to those advisory groups to help shape the criteria.

We will be getting started with that in June.

So I'm really looking forward to starting to engage in that part of the project.

And Natasha Alana, 30 second closing comment.

For anyone who is listening today and if we've piqued your interest about other activities that could be undertaken, how do we get involved in measurement? How can the banks actually help me speak to your local banker? We genuinely want to support producers successfully transition to lower carbon and nature positive.

And there's a range of ways we can do that beyond just the products.

So talk to us about what you're interested in.

There's nothing that you could ask me that I have not heard around regional Australia in the last 12 months.

And I'd love to have the opportunity to chat to you about it as with your local bankers.

Fantastic.

Thanks, Natasha.

Alana.

Look, I agree with what Natasha just said, but also, hopefully we've taken some of the concern out of it a little bit today.

And you can understand that we are all on a journey here together and we're working really closely with industry and farmers and companies.

And farmers and customers and people like Nicole to make sure this isn't an overly burden, a big burden coming at farming because nobody wants that.

We don't want that.

So, yeah, hopefully rest assured that that's something that's come from today.

Fantastic.

I deeply love my bank and I speak to my bank manager at least every week, if not every fortnight.

And I cannot stress the importance of having early and ongoing conversations with your bank about things you are too afraid to ask just to put them on the table.

It has been an absolute privilege to have both Natasha, Nicole and Alana in the room with us to have this panel session.

Thank you for your time.

Thank you for being here.

Thank you for your expertise that you bring.

And please put your hands together for our panelists.

[ENDS]   

ESG essentials and sustainability frameworks

Our speakers look at applying natural capital frameworks to agricultural industries and outline how landholders can start their journey in ESG and sustainability requirements.

The landholder experience of navigating ESG and sustainability requirements on-farm.

Natural Capital Conversations: Navigating ESG and sustainability requirements on farm.

9:48

Natural Capital Conversations: ESG and sustainability frameworks. Industry premiums & my BMO program

15:08

Natural Capital Conversations: ESG & sustainability frameworks panel session III

11:50

Natural Capital Conversations: ESG and sustainability frameworks - Australian Agriculture Sustainability Framework Project

16:52

Natural Capital Conversations: ESG and sustainability frameworks. Cool soils initiative.

7:51

Natural Capital Conversations: Navigating ESG and sustainability requirements on farm.

Video transcript

Natural Capital Conversations: Navigating ESG and sustainability requirements on farm.

… Thank you to Ray, who made an announcement this morning.

It's my great honor and privilege to now be the chair of Riverina, LLS.

It's a role which I'm very excited to be pursuing.

Today, though, I'm speaking to you because I'm a primary producer.

I'm a farmer.

I don't actually live very far from here, just out the road here.

At home, at the moment, we're right in the middle of sowing season.

Things are going to be going to barley.

Canola's in the ground and up, and wheat's next.

So my very glamorous job on the weekend is to head down the paddock and underneath the paddock trees, try and find all the baling twine, which is in the way of the cedar, and get it out of the way.

So for a minute, I want you to picture baling twine down the paddock, which has been used and which I had to move, like this.

That is what natural capital and carbon accounting looks like to farmers just like me.

It's confusing.

It's complex.

It's a lot of conflicting advice, and it can be very, very overwhelming.

What I'm hoping to do today is try and find an end in this baling twine and pull it out a little bit and talk to you about how farmers like me might get started on this natural capital journey.

So I'm going to talk about three things.

I'm going to talk about why farmers like me should care, who are the farmers that look like me, and what are the top four things that I think farmers like me should do right now.

So if I start with the why, we've actually had a lot of speakers today talk to us about why farmers should care about this space.

For me, I always think about that expression, it's the carrot and the stick.

So some of what we're talking about today is an incentive or an advantage in doing something in this space.

So for the mixed farmers like me in the room, you who grow canola, you probably signed an acronym, International Sustainability and Carbon Certification document, which last harvest gave us a premium of $15 a tonne for our canola.

I think the harvest before we got $10 extra per tonne for our canola, which is not an insignificant amount.

Farmers are quite accustomed to this idea of signing up to some criteria for the benefit of, in this case, an extra $15 a tonne.

The other bucket I see is the stick, which is that if we don't get on board with this, there are going to be consequences.

And the consequences might be a lack of access to certain markets unless you can demonstrate what you've actually done in this space.

Thinking about this before today, I was thinking about where the banks sit in all of this, and I'm really heartened by everything that I heard Alana say a little bit about, because up until now, I wasn't quite sure about whether banks were really in the carrot business or whether they were in the stick business.

I'd actually like Alana to give me a discount of at least 2% on my borrowings.

That would be really great.

But I actually think it's going to be business as usual for banks and that our annual reviews, as well as having to show them our budget and our financials, we're actually going to have to have a conversation about what we're doing on farm from a sustainability perspective.

And I think it might become business as usual.

The advice that I'm going to give today, the who are we targeting? The advice that I'm going to give today is for farmers who are like me, who are just in the midst of dipping their toe into the water.

Now, I acknowledge that in this room, of course all the other farmers in this room are the early adopters, the ones who are way out in front, and for whom this is all known.

For you and for everybody else in the room who's part of industry or government or what I like to call ag adjacent, my challenge to you today is to think about the farmers like me that we need to shift into action because it's shifting that moveable middle that's actually going to create impact on the ground.

So the suggestions that I make to you today may be they're for your customers, for your clients, or for the people that you work with.

So here we go.

My top four tips for what farmers like me should do right now.

The first thing I think farmers need to do is to learn the lingo.

If you speak to any farmers, the first comment is how much rain did you get? Do you think we're going to get any on Saturday? What's the season looking like? You might, farmers also have a language all of their own that people outside the industry don't necessarily understand, like how many sheep did they draw for tomorrow in Wagga? And it's the same with this space, natural capital, is the lingo doesn't necessarily come naturally to people who don't, who haven't been exposed to that kind of language.

So my top tip for those producers is to look for some of the things that will teach you some of the language.

So lucky enough, I got to do an LLS, TOECal, online learning module.

It was a really good introductory learn the lingo.

For any of you who know a lot more about it, it's actually really good to go into the deep dive of all of the YouTube clips and further reading that's part of that module, and I recommend it.

All of industries have some kind of learning modules available, and I'm most familiar with red meat, so sheep and beef, and I know a lot about what MLA is doing in this space, and I can recommend to you their carbon 101 and carbon in action e-learning modules, which are on the My MLA website, as a really good place to get your head around the language and be toe in the water of what this is all about.

The second thing that I think farmers should do is have a go at a carbon account even if it's not perfect, and it won't be perfect because it is a little bit daunting when you first look at that SB GAF tool that Richard Eckhart at the University of Melbourne put together, but you got to have a go because you need to get your head around the kinds of information that you need to have at your fingertips, the things that are relevant, and perhaps the things that are irrelevant.

What I learnt from doing the MLA quick start carbon calculator was that there was a lot of things missing from that calculator, and there's some of those calculators which are still very much in a development phase.

I personally am looking for the, another acronym, Agricultural Innovation Australia's Mixed Farming Tool, which was announced at Evoke Ag in Perth in February, as a potential solution to the complexity of mixed farming and the joining more than one enterprise together.

So for me that would be red meat and grains.

Number three thing that I think farmers like me should do is critically assess their landscape, to have a look in their own backyard at what they've actually got.

Now I put my hand up to be a part of the Riverina LLS, Natural Capital Profile Project, that's a bit of a mouthful.

Today I was handed this beautiful document with this lovely tree of mine on the front.

Thanks to the team they've given me a bit of an assessment of my farm's natural capital, and it's given me some sign posts to the things that I might look at, both on the ground and in terms of environmental markets in the future, and it's something that I think we should all do, which is have a critical look at what's in our backyards.

As a producer we tend to look at the productive areas of the farm, and this is an opportunity to look at the areas which we might have once considered to be the unproductive areas.

The fourth thing that I want to do, I think farmers like me should do, is decide where they're going to store this data.

It was really great that Katie told me that it's going to align with my farm accounting software, that's absolutely fabulous, because people are going to start asking me for my data and it would be really good if I had it in a really handy place.

All of these sustainability frameworks rely on the metrics and the data being recorded, and I can guarantee you that it will be farmers like me that need to supply those metrics.

That's it from me, I just hope that I've given you an idea about why we should care and what we should care about, and if there's any smart person in the room who can work out what I should be doing with my bailing twine, my net wrap, and my silage wrap to be more farm waste efficient, that would be really great.

Thank you.

Thanks so much, Lisa, it's always good to have a land holder's perspective, and with the silage wrap have a chat to local councils in this region, the Canberra Region Joint Organisation have a circular economy strategy to look at what to do with that wrap.

[ENDS] 

On-farm natural capital accounting with Farming for the Future

In this session, our speakers discuss data collection insights, natural capital benefits and what’s next for landholders before answering audience questions as a panel.

41:29

Natural Capital Conversations: On farm natural capital accounting w/ farming for the future (FFTF)

Read transcript
Video transcript

Natural Capital Conversations: On farm natural capital accounting w/ farming for the future (FFTF)

- The session is on-farm natural capital accounting.

This session is, not that I can have favourites, but one of my favourites.

This session is on on-farm natural capital accounting.

And we have four panelists who will each stand up here and give a five minute presentation.

Following those five minute presentations, we'll head back to a panel session.

And we really wanna have a dynamic and engaging conversation with questions from the audience.

We've allowed 25 minutes for that Q&A between you and them.

And Kate and her colleagues will be taking around the microphones when we get to that point.

Our four speakers, their bios are on your table in your program.

We have Mark Gardner, who's the founder of Vanguard Business Services.

We have Kylie Durant, who is the NRM project manager for Holbrook Land Care Network.

We have Angela Horton, who is the strategic environments manager farming for the future.

And we have Claire Cannon, a farmer from, oh damn it, - Wumagera.

- Wumagera.

God, I-- - Wumagera.

- I've been checking ahead that I could say everything and I've been caught out.

Welcome, as I said, this is the real deal.

They'll monitor their own time.

I've promised not to come up here and stalk them and they've each got five minutes each.

So please make them welcome.

Our beautiful panel, thank you.

(audience applauding) - Thank you very much.

And thank you to LLS for putting on such a fabulously informative day.

I hope that the sugar is kicking in and you can stay awake for our session.

Also great to be on Wurundjeri Country and really wanna recognize and appreciate the stewardship that came before us.

So Farming for the Future is a program, is the flagship program of the MacDoc Foundation.

The MacDoc Foundation is the family foundation of Pru and Alistair MacLeod.

And they are really passionate about healthy and resilient, the health and resilience of productive landscapes and rural and regional communities and accelerating action towards climate change and biodiversity loss solutions.

So we've been provided with, really strong direction from them to use their foundation's funding and their auspicing power to reveal the relationship between natural capital and farm business performance.

So while we've heard a lot today about collecting data for reporting purposes beyond the farm gate, for marketing purposes and for crediting opportunities beyond the farm gate, this is all about collecting information for behind the gate.

This is for farmers and for how they can use this information to optimize for themselves the natural capital on their properties.

Being a foundation, we don't have a commercial horse in the race.

We are doing this for the public good.

And in that, all of the work that we produce, all of our insights, all of the data insights, all of the protocols, all of the tools and kit that we are producing will be gifted to the industry.

And that's a really important element because it means that we can and need to collaborate.

And the foundation has set us the four high level values for which we have to work towards.

And obviously delivering the public interest collaboration over competition is key.

We couldn't do this project without collaborating with our industry partners.

So we have worked really quite hard to create our own extension network, if you like, working with farm advisors, with industry partners.

MLA and AWY have funded a lot of, supported the project to date.

And we continue to work with other impact partners and our lovely friends at Holbrook Landcare and other ecologists across the country to collect the data with our farmers and with our farm advisors.

So that's why we're all here today.

The other element that's key to our work is empowering the producers.

This information is for farmers first up.

And we wanna make sure that we're setting the ground rules as we engage with the industry so that they have the power in the relationship as much as a bank or the supply chain.

We wanna lift or level out the power dynamic between the different stakeholders.

And we're absolutely doing this in a learning mindset.

So we'll show you some early results from our findings, but this is absolutely the first word.

This is the largest study of its kind that's ever been done in the world.

And so we're really proud of the work that we've done, but it is absolutely the first word, not the last word.

There's a, we know we'll probably get things wrong.

There's things to improve.

We know we can do better, but we've made a crack.

We call this our plan on a page.

Basically we're looking at three things that we're trying to do because we don't wanna create this large evidence base, which we need, to be able to reveal the relationship between natural capital and farm performance and leave it there.

What we're trying to do, we think if we're gonna put the effort into that, we need to make this an industry infrastructure that lives beyond the project.

So at the same time as we're building that large industry evidence, we're also building the capability and embedding this into the network.

Hence also that extensive extension network that we're developing.

We wanna make sure that the capability is transferred to the industry to be able to keep this happening because over time we know climate is going to change and measuring these relationships between farm performance and natural capital will be really crucial to making sure that we can adapt as quickly as possible to those unexpected or unknown changes.

The diagnostic tool is really key here.

This is a benchmarking approach whereby we can measure over time and measure within regions so that farmers can understand how they're tracking against their peers.

And at the same time we're also working with the supply chains and finance sector.

We've got a partnership with ASFI who were here earlier today and we're working with the banks and we're also working with supply chains with certification schemes, et cetera, looking at our metrics as to how they can use them in reporting as well.

This is our hypothesis on a page.

Along the bottom we've got natural capital and along the y-axis we've got farm performance.

So what this is showing is how we think we can use this diagnostic platform where when you're at the top of that green curve you are optimizing your natural capital and your farm performance.

To the left of that green curve, of that green line at 4.8, there's an opportunity for a farmer to improve their natural capital and gain financial benefits from that.

At the same time that they're doing that, they'll also be providing public goods.

There'll be more carbon, there'll be more biodiversity and it's working through exactly how we can do that with this scientific evidence base that will inform the advisers to be able to help the farmers to make those gains.

Similarly, on the right-hand side of that solid green line is the trade-off zone.

And this is also an important consideration for all the discussions that came earlier about carbon and biodiversity markets because we need farmers to understand the value of that.

What are they giving up to provide those additional services and what is that actually worth? How can they demand and be part of the negotiation rather than just being told the price? We've now done this.

We're very proud that we've actually achieved this largest project, 130 farms, the livestock farms only at this point in time.

And we've shown that we can do this work.

We've developed those protocols.

We've developed those networks.

And we've got the data science and systems and we've now developed the analysis techniques.

So the question at end, we've also developed through the co-design with all our partners, the outputs that are really useful for farmers.

And that's been the key thing here, making it actionable for farmers.

So I'm gonna leave, unfortunately, this is the key slide, but trying to stick to my five minutes, I'm going to leave this for Mark to talk to.

No, one more thing.

The farmers come out with a very intensive farm report, you'll see some of the outcomes of which when Kylie speaks, but they are yet to receive their economic report.

So they also get a really detailed economic report that provides them with those insights about how they're tracking within their regional area and the broader dataset.

So that's still to come.

But again, this is what makes it actionable.

This is really the why they would make a change to any of their management.

And the detailed natural capital report is the how they would go about doing that.

So I'll hand over to Kylie.

- Thank you, Angela.

I've got a bit of imposter syndrome.

I've been called an ecologist before.

In fact, when I turned up on a couple of farms that were our members farms, they went, "Oh, you know, where's the ecologist?" I was like, "No, it's me." And I think this is a really great space for Landcare to be in.

In this new world of markets, we are really struggling, I guess, to find our place.

How do we keep connection with our members? How do we provide valuable services? And it's clearly in this data.

We, I guess, are on the ground.

We know our landscapes and we know our farmers as well.

And so I think we're in a really good position to engage in this new world.

And thank you for farming for the future, for the opportunity.

The fellow ecologists in the room may have seen this diagram before.

So the concept of how you go about doing a farm and doing a natural capital account.

Don't worry too much about the detail of this because you won't be able to read it.

But I think, sorry, it's not mine.

So there's an ecological, I guess, continuum in our landscapes from really replaced, our productive landscapes, our exotic pastures, all the way through to our bush blocks and stuff that's in really good condition.

So everything on a farm fits in one of these boxes in the state and transition model.

So we have the really good bits which are our reference condition.

We have a whole continuum of our woodlands and forests that are in various stages of either degradation or getting better.

And that's along a transition.

So they are our transitioning landscapes.

We have, well, that's another transitioning landscape.

And we have a derived grassland.

So where the woody vegetation's been cleared.

And we have a transition from things that are native pastures and have a lot of, you know, still have those ecological values all the way through to just sign exotic pastures.

And of course, we have crops.

We have planted vegetation and all that sort of thing.

So the concept of doing a natural capital account is looking at a farm and going, well, you know, what's that mix of landscapes that we have? There is a sausage machine of data sort of processing that goes on.

Danny O'Brien is the king of that.

And so in order to come up with that state and transition categories across a farm using canopy cover, the remote sense data canopy cover, using ground cover data and doing a clever algorithm which puts every place in the farm in one of those categories in the state and transition model.

So that's the third, I can't point on this, I don't think, the third map across.

And then the most important thing is ground treating that.

So I think they came up with 30 points per holding was how it was done.

And they were randomly or not so randomly picked for access and things like that.

So there were 30 places on the farm in those different categories that we went to and actually took some measurements.

And that was my job, I suppose.

How that data was collected, there was an app, very clever use of a safety culture app that was adapted for the purpose.

And it was a very easy process from an ecologist's point of view.

Can I say it again? To engage with the farmer, work out where we had to go and just go and get on with the job.

So to those 30 points and collecting a set of data.

What that gave in the end, so was to compile a register of all those natural assets on the farm in map form and in table form, which I think we'll get to next.

And that was then used to be able to generate a set of indices for the natural capital account, which are really small on the corner there, but I think we'll be looking at in Mark's presentation.

So I think called forage condition, which is really about the peraneality and the palatability of your pastures.

And that's a measure of sort of, I guess, resilience.

We use ground cover as a proxy for soil condition.

There was a proximity score.

So that was about the tree cover that was near your production area.

And it's a sort of measure of shade and shelter benefit.

There was connectivity, which is pretty self-explanatory, and aggregation.

So on a property, all your vegetation can be in one block or it might be scattered across your farm.

And that gives you a bit of a measure on what your options are in terms of improving, I guess, your ecological condition.

And then an overall score for ecological condition was part of the state and transition model.

How much of it is highly degraded ecosystems, which you might actually want to keep? I mean, that's your production area and that's an area that's probably not going to be developed ecologically.

But then what other areas have you got that are a bit resilient in that transitioning phase that you could move to another state and improve your natural capital? And I think there was also carbon emissions were done as well.

So looking at that carbon account.

So ecological condition, which is really about biodiversity, isn't it? Because it's what vegetation types and ecological state things are in.

And we know that the better the ecological condition, the more likely it is to support biodiversity.

So from a farmer's point of view, this is the sort of report that comes out of the...

I'm going to recommend some colour changes to this one because it can be quite confusing.

But essentially, you get a map showing it spatially, you get a table that pulls out all the assets and what percent of the farm it is, that sort of thing, and you get this indices, which I'll leave the others to talk about more generally.

I think it's really important that everybody looks at an indices and says, "Oh, how do you get to one? Because that must be the best." But all farms are different in where they start with natural capital.

Some are highly cleared landscapes that you're never going to get a good result.

So I think the power of this is actually in doing it again and seeing your change.

So I think it's...

Yeah, Claire might talk a little bit more about that.

Some of the other indices, this is what the maps look like.

So there was a parent project, I guess, in the La Trobe Uni where they did a lot more data collection.

And this is on Wamagama Station.

So there's the proximity indices, but turned into something, a picture that shows shelter, like in winter.

These are the areas that are covered with shelter on your farm and summer as well.

And there's also capacity to add on birds and plant species richness, which would be the gold standard.

And there's the emissions profile.

So that's me.

That's how it was done.

So that data collection on an app, whacking it in, producing it through a sausage machine of data processing, you know, it spits out these products.

Yeah.

OK, Claire.

Thank you, Kylie.

I'm just going to tell you a story of my farm, Wamagama Station.

My parents bought it in 1962.

And it was originally 2,500 acres.

It's now 6,500 acres.

And I took it over 12 years ago when my mother died.

And when I took it over, I really wanted to have three values, high animal welfare, high sustainability, and be a good neighbor in our community.

And I really didn't know how I was going to do this.

So I started-- I was approached by the Biodiversity Conservation Trust.

And I had a couple of the colleges come to me and say, actually, Claire, we want to put a third of your property under covenant.

And that's where we started.

And you can see on that map on the bottom west-- it's bottom, I suppose, left hand, right hand corner.

Can someone point? You can see that wooded area is the covenant country.

And we've heard Owen and Helen talk about the BCT.

And so I won't go back there and say the same story.

But that was a great beginning for me.

We grazed that country six months of the year.

It's critically endangered grassy box woodland, of which we know there's less than 5% left in southern Australia.

So to be part of preserving that and still grazing it for part of the year with our cattle being ecosystem services is great.

We have also grass-fed only beef under the Never Ever program.

And we're now ZQ accredited merino wool.

I had this covenant.

I had these values.

And then we produced this wool.

And it'd be soul destroying to see it go to market and be auctioned to some random Chinese mill and not know where it's going.

So ZQ is high animal welfare, high sustainability, and non-mulesed wool.

And we're also ZQRX accredited, which is about a wagon wheel of about 15 other points, including plastic, waste, water, scientific research, biodiversity, community engagement, well-being.

And the wool has an open and accountable and traceable straight through to brands such as Icebreaker, North Face, Healy Hansen, and Stella McCartney.

So as a wool producer to know where my wool's going is fantastic.

And to go and meet and talk about wool with the president of Icebreaker through ZQ, I mean, this to me is what farming's about.

So when La Trobe approached me and said, would you like to be one of the 130 farms to do this farm-based natural capital accounting, I mean, it absolutely fed into my market and what I was trying to do, as does the sort of next step farming for the future.

So I was going to say four things, just four key takeaways, and there's many that I got from this project and we're still going through all the extraordinary data.

The first thing is, you know, I'm a great believer is when as farmers you introduce yourself, if you know how many bird species and you can verify how many you've got on the farm, tell people because it talks up to your biodiversity.

So although La Trobe, because of the floods, couldn't get and do all my bird data, I've had birds on farms come and we've got 113 different bird species and 10 of the 15 threatened or critically endangered bird species in our area.

So I'm very proud about that and, you know, the covenant has a lot to do with that because it's all about the acacia, wattle level and those small birds that live there.

What I learned, which was fascinating, was in the 2019 and 2020 drought, we put three and a half thousand of our sheep into containment yards.

Now, we're not normally allowed to do that with ZQ, but we are in a crisis and we had sacrifice paddocks.

And if you look at that, the light spot in the middle center of that map, you can see where our sacrifice paddocks are or were.

But what was the outcome of that was that we actually barely lost ground cover during the drought.

And so if you want to preserve top soils, preserve carbon, that's what we're trying to do.

And the final, I think that just so clear to see this mapping, you know, we've got, Kylie put up a lot of those maps.

And for me to actually visually see those maps about the farm, to sort of verify what you qualitatively knew is really empowering and you know that you're on the right path.

And finally, as a ZQ wall producer, we have to have a carbon per kilo of wool at less than 32, sorry, 45 kilos of carbon per kilo of wool.

We're at 32.

So I'm super proud of that.

And there's a lot of work that farming for the future has done about whether we're a carbon neutral or actually a carbon sink.

We have some complications in that because I got carbon offsets for the covenant.

But that all can be worked out.

And I think that's super exciting.

And so when we're talking about green washing, we're talking about brands.

It's the data is that what really is the is the change maker.

And ZQ is going to put their tags on on all the wool they sell through their brand partners.

And I really hope that some of this data from farming for the future will go on to those tags for the consumer to educate them.

Thank you.

I'll just get the slides sorted.

OK, hi, everyone.

I'm Mark Gardner.

I'm a farm consultant based at Dubbo and a part of the delivery team, our business, but also have been working part time with farming for the future as we get to the conclusion of analyzing the data and working with our partners to work out what it means.

So it then can find its way out into the farming community.

So it's been a really exciting project.

First of its kind, first time that 130 farms have put in five years of financial and production data.

Very detailed.

Had ecologists assessing natural capital on farm.

Mixing with spatial data.

And now we've got a big database that we can look at the relationships between farm profit and elements of farm profit with natural capital and to see what the benefits of natural capital are or what the costs of natural capital are for the individual farm business.

The other thing, we've also collected well-being data, which we haven't yet analyzed.

So it's the third part of the pot, if you like.

Really good financial, really good natural capital, really good well-being data and starting to look at the relationships of how natural capital contributes to those elements.

So one of the things we did at the start of the project, it's a super collaborative project.

You know, we're really at the start of the journey and the best way of working out the journey is to get diverse people together and plot out what we think is best bet and have a go.

And if it doesn't work, quickly fine tune it.

And that's the approach that we've used.

So we've got a lot of partners.

We have accountants, banks, R&D corporations.

We have our founders, philanthropists.

We have consultants.

And of course, we've been talking with LLS too, particularly yesterday was great yarns about how we might be able to disseminate some of this information.

And we have super ecologists like Kylie, also with the NRM groups that we've worked with.

So we've, you know, it's been a great collaboration, great harvest of the best ideas we can on this topic.

We surveyed the farmers to work out, well, you know, in terms of sort of farm profitability and how your farm's going, what are the key elements, the essence of what you'd like to get information back on.

And the word cloud there is resilience.

We're so important, obviously, productivity and profitability.

So the assessments that we've been looking at from the financial components related to natural capital have an emphasis on profitability, resilience and productivity of the farm.

Really interestingly, here's another way of representing that information.

There's the top 12 scores that came back from that survey about the motivations around building natural capital on their farm.

And the first five of those scores are related to natural capital's direct effect on the farm performance.

Now, I think that's a really important message.

And the next were about commodity markets.

And it was number eight, which was natural capital markets.

So it's helped us understand that natural capital, the way we've been looking at it, there are two distinct benefits.

One is post farm gate.

And a lot of the stuff, the really exciting opportunities we were hearing today about markets and all of the supply chains and all of that.

That's some of the off farm benefits.

But farmers are really interested in how does it impact my profitability, resilience, productivity.

And I think that's an important message that this project can speak into and provide information to.

When we analyzed the data, there were three particular groups that fell out.

There was a group of producers that had high chemical use group one, exotic pastures, trees that were set aside and low number of paddocks per DSE.

And the second group and the third group were low chemical use, high naturalized pastures, low stocking intensity, and adjusted their livestock numbers up and down according to season.

So we were able to separate out that there were three clusters or types of farms.

Each with a different level of natural capital.

And so we at the moment, we're still analyzing the data.

But this is the first really important bit of data because the results show that there is a positive relationship across most of those indices that Kylie spoke about, the six natural capital indices.

The three on the top are most important because those relationships are statistically significant.

When the econometricians have done all of their analysis, those are the significant relationships.

Along the bottom, if we look at ecological condition along the bottom, that's the score of ecological condition.

And there's a measure of profitability on the left hand side.

And you can see there's a peak area of natural capital and business benefit.

There's an area where increasing natural capital has a positive business benefit, but there's also a back end of the curve.

And you can see that nature of the curve on those different natural capital indices.

The proximity one's a really interesting one.

The proximity of trees to the production area, which is the graph on the third one there.

That's a straight line and a significant relationship too.

So these are the sort of information that we can get out so that when advisors are going on farms, and we're talking to farmers about natural capital, our information and our advice is now starting to get formed on really solid evidence.

And the information and advice we're giving is not just building natural capital.

In some elements that may not be a good thing profitability wise, but in many it will be.

But it really informs our advice and that's something that the advisors are really excited about.

And the last graph I'm just going to flick back to is...

It's going back in time.

Here.

The other thing that came in that word cloud was resilience.

And this is a measure of the resilience of the farm business from a profitability sense as it relates to ecological condition along that horizontal scale.

So you can see that there's an increasing zone.

If we start at the left, as we improve our ecological condition, the farms get more resilient.

Now that was really important to farmers, resilience.

And it's resilient to increases in input prices, resilience in drop in market prices, resilience in rainfall and resilience in term of trade.

In all of those, you can see a relationship between ecological condition and improving business resilience.

And this is the sort of data we've only not even yet scratched the surface.

We need to drill down to look at some of the regional differences.

And there's a lot more relational stuff between natural capital and elements of production and finance that we'll be looking at.

But the key thing, takeaway message is this is a really important project and it's really important to follow its progress because it's providing farm level information that farmers can use to shape up their natural capital strategy.

And at the same time, like Claire's doing, use that in a way that also outside the farm gate that can create terrific business benefit.

And you can follow the project on farmingforthefuture.org.au.

Sign up to the newsletter and as the information comes out, you'll know when it comes out.

And personally, I can't wait till the wellbeing stuff comes out and we can look at the relationship between farmer wellbeing and natural capital.

How cool will that be? Thank you.

Thanks so much, Mark.

I was actually listening to a podcast last night that talked about the relationship between wellbeing and the role of natural capital in that.

So it was something that took me by surprise and I look forward to hearing more about that.

Questions from the audience.

Kate has a microphone and we have one just here.

As the microphone makes its way to that person asking a question.

One question that I have from the audience here is if a land holder is starting out now, where would you direct them to start if they wanted to make their way down the path of natural capital? And it'd be good to have an answer from each of you because you all had a different experience.

Just come and see me.

No, I think the natural capital profile, I think that was mentioned last time, is a really great entry level into this.

The Farming for the Future program is open for new projects and I think Ang can talk a bit more about what the future is there.

But it really is, I think Lisa said it the best, is really having a good look at what you have on your farm, getting familiar with the lingo, even from an ecological perspective, getting used to the names for the vegetation communities you've got on your place.

When BCT puts a tender out, it puts it out for white box woodland in blah blah blah blah blah.

How do you know if you've got some of that? And so I think the first step is really getting somebody on farm that can help you identify what some of those assets are.

So a profile would be the first step, but definitely getting involved in measuring as step two.

Claire Parks will be coming up here in about 10 minutes to speak about the role of the natural capital advisors as well.

Yeah, we can put in a plug for LLS, absolutely.

Also, Farming for the Future, we've got an expression of interest for farmers that they can sign up to so that when our next round is happening, we can include them in the program.

Well, I can just speak for myself.

I mean, Wumagama has a 40 year relationship with Holbrook Landcare and I can't think of a more trusted organization in the district.

I mean, it's incredible.

And that's the way you start your farming journey.

And then I went, well, the BCT came to me, but again, Landcare can help you.

I think that's just simple for me.

And Mark? I think it's great to start with some sort of assessment of what you've got in terms of natural capital and what your farm strengths are.

That's really good.

But I think the other side of it is to be thinking about what your goals are in terms of a holistic perspective for natural capital on your farm.

How do you want to see your landscape look? That the sort of level of profitability you require and also the lifestyle, because when you invest in natural capital, it costs either capital, money or labor.

So we don't want people getting burnt out doing stuff on the natural capital sense.

It's got to fit into that sort of balanced view of the world.

So, you know, where are we at? Where do we want to go? And then plot, how do we get there? Questions from the audience? Angie talked about that this is the first word on this.

And I know early on we were talking about you're talking about around 1500 farms was the intention, but uncertain how many you'd need.

What's the number you're thinking you need to get really strong evidence now? Yeah.

So in the graphs that we showed before, the three on the bottom of those weren't statistically significant.

And we would like to get more data on the livestock farms in similar areas to improve the data outcomes.

One hundred and thirty farms, we probably need four hundred farms.

So a doubling of what we've got already or a bit more.

We're looking for finance to help us do that.

And we've put in for climate smart agriculture grants, fingers crossed, to help us get to those sorts of numbers.

Beyond that, we will be beyond livestock.

So we're already talking to hort and viticulture and dairy.

And we also need to change environments from grassy woodlands where we've largely been into rangelands and other areas.

So that is in our near future, we hope.

Another question that's come in, assuming that this has been very livestock focused, is there a similar research project or information for cropping or mixed farming? Of course, cropping.

Cropping is critically important to do this work on.

And it's so great to see cool soils here before talking about the work they're doing on the on the scope three stuff, because that's we're kind of hoping they're going to solve the problem for us in cropping, which is looking at soil health.

The only way we can really do cropping is with when the soil scientists agree on how to measure for soil health at the sort of scale that we're looking at with the representative sampling scheme that's not going to send us all broke.

So we desperately want to get out there, but we need to solve that one first.

Another question has just come in, which I would love the person to ask it with the microphone.

It says, I understand I have to know my number in regards to carbon emissions.

Do I then have to have my natural capital profile and an ecological condition in the sea? I suppose I would answer that by saying you don't have to.

You're I sort of put it would put it back and maybe, Mark, you should speak to this in terms of the farm goals again.

The greenhouse.

Yes, the market is going to be asking for this sort of information.

The the industry that we've talked about in terms of ecological condition, we initially thought we would have one industry and we would just be able to.

Calculate all of our natural capital measures into one industry.

But what we found from that is that we were going to end up in trade offs between those indices and it wasn't going to be actionable for farmers.

So we've actually made a conscious decision to keep those different indices separate and report on all of them, because what's really important to farmers is that they can then make decisions about what to action.

Do I put trees in a certain spot? Do I do I concentrate on my pastures? What's of interest to them? And so I wouldn't suggest that a farmer needs to have ecological condition index, but I think they need to understand what on their farm is providing the ecosystem services to the outcomes that they're wanting to do and then choose some of those that they can concentrate on to improve over time.

But I'm going to hand to the ecologist for a better word.

I mean, I was just thinking about that one one big thing that is a real bugbear for me is we look at the industry sustainability strategies and they're the things that I guess is putting the spotlight on farmers.

What's your biodiversity like? And all of those metrics at the moment, the beef shape and I mean, the Australian are still developing a blank because they just said it's too hard.

And I think that's so wrong.

And just the ability to, I guess, set some standards through through a program like Farming for the Future and having having some measures, it's proves that it can be done.

And I think we get we really need to go there and we need to be talking to industry about driving from the bottom up what that looks like.

So I don't think that answered the question, but I really want to say it.

It's all very valuable information.

We're out of time, so concluding comments, please.

Well, I just wanted to say I've been involved with Australian Will Innovation and also with ZQ.

And I think the storytelling aspect of farming is super important.

There's a lot of podcasts out there and we need to tell our stories of what we're doing.

It's not just the data, it's the stories.

Fantastic.

Thank you so much for being on our panel today and thank you for your insights, your stories, your experience.

I know it's been incredibly valuable for everyone here.

So if we can put our hands together to say thank you to our panel.

[ENDS] 

Disclaimer

The information provided is of a general nature and does not take your specific needs or circumstances into consideration. Please ensure that you review your own situation, objectives and requirements and seek professional advice before making any business or financial decisions. 

Contact Local Land Services NSW

Our team welcome your enquiries, feedback and comments. 

Online customer enquiry form

Search your LLS office

Local Land Services is moving to nsw.gov.au. During the change, you might find the information you are looking for at lls.nsw.gov.au

Phone:1300 795 299

Related information

Download as PDF Print this page
Top of page