A healthy Reef is best for business
WE ARE SEEING … NEW PARTNERSHIPS BETWEEN BUSINESS AND ENVIRONMENTAL ORGANISATIONS WHICH ARE EXPANDING MARKETS … AND REDUCING COSTS AND RISKS.
STEPHANIE RUSSO LAST year, Deloitte Access Economics gave us 56 billion reasons to value (and invest in) the health of the Great Barrier Reef, but as is often the case when it comes to environmental challenges it left one big question unanswered – who is going to pay?
This is a key barrier that organisations like the Reef Restoration Foundation, which is working to regenerate coral reefs at Fitzroy Island and other high-value coral reefs, have encountered when working to attract investors and partners.
To date, governments have been the biggest investor in Reef health but this is not a long-term strategy.
Governments are increasingly operating in a constrained budget environment and the size and complexity of the challenges facing the Reef are already greater than available funding.
This void will only increase as risks and impacts intensify.
Preserving and enhancing the health of the Reef requires us to look for other sources of funding.
Private capital can be directed to activities which support economic growth while reducing pressure on the environment, but the challenge is demonstrating a business case that will attract investment.
The Great Barrier Reef provides a huge amount of public benefit through the environmental functions it performs, but it also generates significant economic activity and supports more than 64,000 jobs in tourism, fishing, recreation and science.
Despite recent reports that parts of the Reef are bouncing back from mass bleaching events in 2016 and 2017, the degradation we are seeing is not only an environmental risk but also a key business risk.
Just like agriculture is dependent on the quality of its soil, access to water and biodiversity, tourism and the recreational and commercial fishing industries rely on a healthy reef.
Coastal communities depend on coral reefs for jobs and to provide protection from physical threats like storm surges which can destroy critical infrastructure and damage economies.
There is a strong argument for investment in reef restoration and building the resilience of the Reef at a local scale, while continuing to address the systemic threats of climate change and water quality.
Increasingly we are seeing that the private sector has a key role to play.
We are seeing the development of new partnerships between business and environmental organisations which are expanding markets, increasing productivity and reducing costs and risks.
In Mexico, the government, hotel owners, Nature Conservancy, the local science community and reinsurer Swiss Re have come together to finance maintenance of reefs and beaches, and purchase insurance to ensure these vital ecosystems are restored after extreme storm events. This collaborative approach, called the Coastal Zone Management Trust, recognises the importance of the reef to the viability of their businesses and community.
In Australia, the National Australia Bank’s Natural Value strategy is demonstra- ting the link between good management of natural capital and financial resilience and performance over time.
NAB has signalled that natural capital will be taken into account when making decisions on credit, supporting and incentivising clients to invest in building resilience and long-term sustainability.
The key to ensuring a sustainable future lies in businesses, financiers and insurers understanding the connections between natural systems and our economy, and businesses being able to communicate that they are lowering their risk, building resilience and ensuring their long-term financial performance by looking after our natural assets. Stephanie Russo, manager, Natural Capital, corporate affairs, NAB