Climateworks Centre and retailer Woolworths Group have announced they will co-design a new pilot program to test incentives for farmers to measure their natural capital in Woolworths Group food supply chains.
Natural capital is a way of integrating nature into the economy, with the aim to make nature’s value visible.
‘Many farmers recognise the need to protect the ecosystems that support their production and provide wider benefits to society,’ said Dr Eithne Cahill, Climateworks Program Impact Manager. ‘However, the market-based system that they participate in does not necessarily assign a value to nature and the various services provided by the environment.
‘This pilot is a first attempt to demonstrate a clear, consistent, and agreed approach to measuring natural capital, and to inform decision making on-farm and in the broader supply chain,’ said Dr Cahill.
‘Different ways of measuring the state of nature have emerged across industries and land use sectors, and this fragmentation is a barrier to valuing nature at scale,’ she said.
Robust measurement can help demonstrate the private and public benefit of maintaining and improving nature to investors, buyers, and consumers of agricultural products. It can also potentially open new income streams for farmers, such as biodiversity credits and stewardship payments.
‘This pilot seeks to demonstrate how farmers can benefit from measuring and improving natural capital on their properties,’ said Troy Nixon, Sustainable Agriculture Manager for Woolworths Group. ‘Beginning in October 2023, the pilot will explore the practicalities of measuring natural capital.’
Woolworths Group will identify a supply chain and product category in which to offer farmers the opportunity to be voluntary participants in the pilot. The findings will inform how Woolworths Group, and stakeholders in its supply chains, can consider natural capital risks and opportunities in their decision making.
The pilot will draw on metrics identified in the Natural Capital Measurement Catalogue.
Climateworks developed the catalogue to provide a consistent reference source for a comprehensive set of natural capital metrics and methods, after extensive stakeholder and expert input. It is part of the Natural Capital Investment Initiative which has been funded by the Macdoch Foundation. This is one of several pilots to be announced as part of the initiative.
‘The multi-year program is a significant collaborative effort involving a range of stakeholders and partners. This catalogue offers broader potential to help inform company preparations for corporate disclosure frameworks, such as the Taskforce on Nature-related Financial Disclosures,’ said Dr Cahill.
The Climateworks and Woolworths Group natural capital pilot is expected to run until at least December 2024.