So many farmers and producers take great personal pride in the natural assets on their farms. They observe how, under their management, these natural values are improving, maturing and becoming more valuable – greater diversity of plants and animals, clearer water in creeks and dams, healthier soils with increasing levels of organic matter, carbon and soil animal life. Many of these natural assets provide important benefits to farmers’ production and operations, but also to the wider community. These are known as ecosystem services. Clean water improves animal production, but also provides downstream communities with good drinking water that requires less treatment before use. Trees and woodlands are carbon sinks and wildlife habitat, both of which benefit the wider community.
The wider community is expecting increasingly greater transparency of food and fibre production and greater accountability from their financiers and investments. Markets are increasingly looking for, and demanding evidence of positive climate, nature and societal outcomes from their value chains and investments to demonstrate their commitments and contributions to meeting climate targets, reporting on Environment, Social and Governance (ESG) accountabilities, and demonstrating corporate social responsibility.
These trends are rapidly escalating because of:
Regenerative food and fibre production is becoming of increasing interest to markets because it is generally nature-positive, reduces climate risk, promotes farmer wellbeing and delivers healthy and nutritious food to consumers. The regenerative nature of production provides corporates with measurable performance indicators to support their reporting and accounting against climate, nature and social targets and obligations.
Value chain suppliers with corporate commitments to climate, nature and social performance are experiencing challenges in establishing effective and efficient systems/processes to measure, verify and report on climate, nature and social outcomes within their value chains. This is particularly true of the red meat sector, owing to the complexity of the value chain, and the relative impacts of market share versus price premium on actors within the value chain.
Finance institutions are increasingly aware of the multiple attributes of regenerative agriculture that mitigate risks – including business and financial, climate, nature and social responsibility risks. Investors are increasingly interested in the performance of their portfolios, and finance institutions are currently developing frameworks to demonstrate this performance (e.g. CBA, Rabobank, NAB). It is anticipated that Agri-banks will progressively favour agri-businesses that can demonstrate the application of regenerative principles and the resulting outcomes in their drive to minimise risk and optimise reputation and performance credentials.
There is a hive of activity currently in Australia and globally around the development of frameworks for climate, nature and social accounting, but many continue to require audits of inputs, plans and processes rather than looking at outcomes. Many are single-topic, for example Science Based Targets for Climate.
Great farm outcomes often go hand-in-hand with indicators of farmer well-being and signs of a healthy business and successful production. How good would it be to collate these great outcomes to tell a comprehensive story of your farm stewardship and the rewards it brings you and others? RCS can help you do this, and we are in the process of developing Farm Portrait, which will collect and analyse ecological and well-being metrics over time, verify management decisions and report on outcomes at the farm level.
RCS Australia has a team ready to work with you and can advise on how to make the most of your natural assets. We are approved advisors in Queensland for Land Restoration Fund carbon farming projects, and trained farm advisors.
Originally authored by Leanne Sommer 2022
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