“The total dependency of goods and services on nature is as humbling as it is frightening.”
So says a recent report from the Australian Conservation Foundation (ACF) titled Risky business: How Australia’s banks and super funds are responding to the nature crisis.
Modelling by IDEEA Group for ACF last year found that roughly half of Australia’s GDP (49% or $896bn) has a moderate to very high direct dependence on nature.
The modelling showed that the sectors with the highest dependency on nature include primary industries like agriculture, forestry, fisheries, food product manufacturing, construction and waste and water services.
These sectors also have some of the highest impacts on nature, eroding the nature on which they depend for the production of goods and services.
The sobering reality of our findings is that Australian banks and super funds are largely failing to assess and take action to mitigate the risks, or seize the new opportunities, associated with their nature-related impacts and dependencies.
The ACF report says: “Australia’s ‘big four’ banks alone have a more than $173 billion credit exposure to agriculture, forestry, fishing and mining – all high impact, high dependency sectors. Australian superannuation funds, on behalf of their members, own around 35% of the ASX, including substantial holdings in high impact, high dependency industries like food retail and manufacturing, construction, and resources.”
Nature is constantly at work, underpinning our economy and our wellbeing by providing ecosystem services. The IDEEA Group modelling also showed that, indirectly, there is not a dollar in our economy that doesn’t depend on nature. Sectors with a lower direct dependency score still depend upon nature through their value chains, and every worker and consumer needs clean air and water, sustenance, their health and a stable climate.
Yet, according to the ACF, 50 percent of banks and 70 percent of super funds have not evaluated their nature related impacts or dependencies.
The ACF report found that banks and super funds are feeling moderate to intense pressure from some stakeholders to consider nature in their business activities. As individual account holders and super fund members, we can turn this pressure up by asking key questions about their dependency on nature.
The report author, Madeleine Coombs, has written a terrific summary article about the link between nature and investment in Australia for The Conversation. She concludes: “Why not ask your super fund and bank what nature-related risks they are exposing your money to?”
Read the full report here Risky business: How Australia’s banks and super funds are responding to the nature crisis.
And get all the details of the GDP modelling here.