State of the Environment

2001

Biodiversity Theme Report

Australia State of the Environment Report 2001 (Theme Report)
Prepared by: Dr Jann Williams, RMIT University, Authors
Published by CSIRO on behalf of the Department of the Environment and Heritage, 2001
ISBN 0 643 06749 3

Roles and Responsibilities (continued)

The Australian private sector and biodiversity

The private sector is crucial to the protection of biodiversity, but the importance of including firms and industries in biodiversity policy formulation and implementation has only been fully recognised in recent years. Traditionally, simple regulatory approaches have been relied on, with little proactive involvement by the private sector. Now, consistent with evolving policy and management approaches-use of non-regulatory approaches, participation, self-regulation, development of green markets, etc. - the position of the private sector in environmental management has changed.

Proposed and emerging market-based approaches, such as biodiversity, carbon credits, ecosystem service credits or tradeable water rights and fisheries quotas, have significant implications for biodiversity. Some attention has recently been given to ecological aspects of water market reform (Cullen et al. 2000).

Plans to minimise impact of development: Corporations [BD Indicator 23.2]

This information was unavailable for this report.

Environmental management guidelines

Broad guidelines for environmental management for corporations have become available in recent years. The development of these by standards organisations is an indicator of how mainstream environmental management is in the corporate world. However, the guidelines tend to be non-specific in terms of biodiversity. Of potentially high significance to biodiversity management, as a management area pervaded by uncertainty and poorly understood causal relationships, is the development of an Australian Standard for Risk Management (Standards Australia 1999), and the production of a handbook for the implementation of the Standard in the environment arena (Standards Australia 2000).

Codes of practice and similar mechanisms have increasingly been developed as self-regulatory approaches within sectors, although the inclusion of biodiversity issues is rarely specific or detailed. Some examples include the following:

A flexible scheme of certification both assesses competencies of guides and contributes to further professional development by identifying training needs. A nationwide cadre of trained assessors is being developed to implement the Program.This Program reflects the growing acceptance of biodiversity issues and the environment more generally as matters of accepted industry concern and practice, and deserving of high and consistent professional standards. In the case of the NEGCP, it will assist in ensuring that nature-based tourism will be better managed, and that people's experience of Australia's biodiversity will be based on quality information and high levels of professional practice.

Certification and accreditation in the ecotourism industry

Australia's biodiversity and natural landscapes are crucial to the economically and socially important tourism industry. Nature-based tourism can be a strong justification and source of resources for preservation, but also, if inappropriately managed or poorly informed, a threat to biodiversity in some locations. The capability and competence of tourist operators and guides can, therefore, determine the potential to assist with protection of biodiversity, both by allowing recognition of its economic importance, and in an educational sense, by exposing the public to quality experiences and information. With the great bulk of the industry comprising domestic tourism, the educational dimension is particularly important.

Rapid growth of nature-based tourism in Australia in the 1990s has led to concerns over the quality, information base, competency and effect of tourism service providers with respect to natural history, biodiversity, Indigenous culture and other issues. The need for standards of practice and competence has been increasingly recognised.

The need for proper accreditation, skills and training has been the subject of a new initiative by the Ecotourism Association of Australia (EAA 2000), which is supported by funding from the Office of National Tourism, and works together with industry, government and other stakeholder interests. Building on the existing Nature and Ecotourism Accreditation Program (NEAP II, released in 2000), this collaboration has led to the development of a national Nature and Ecotour Guide Certification Program (NEGCP).

The NEGCP, launched in late 2000, is a voluntary, industry-based initiative aimed at promoting, recognising and rewarding best practice by nature and ecotour guides. It has been designed to suit both experienced operators with existing skills, as well as people entering the industry. Certification is based on benchmarks defined around:

Source: Ecotourism Association of Australia 2000, Nature and Ecotour Guide Certification Program: Progress report June 2000. Unpublished report.

Environmental reporting

Many corporations and industry sectors are now participating in 'green' labelling and accreditation systems. The fisheries and forestry sectors have developed initiatives to encourage and deliver market-driven incentives for sustainable production: the Forest Stewardship Council (FSC) (1993) and the Marine Stewardship Council (MSC) (1996). The Councils combine industry, environmental, community and Indigenous interests, and display of the FSC or MSC logos requires that products are harvested and processed in line with stated principles and criteria. The Western Rock Lobster fishery gained MSC certification in 2000.

Public environmental reporting by Australian corporations is an area of increasing activity and can be regarded as a major, recent development. Potentially, environmental reports can be a key mechanism for public disclosure of a corporation's effect on the environment (including biodiversity) and for continual monitoring and improvement in performance. However, the apparent relevance of available reports to biodiversity is generally compromised by lack of detail or specificity.

The mining sector

A major NGO concerned with biodiversity issues, World Wildlife Fund (WWF) Australia, independently assesses environmental reporting in the mining sector undertaken in line with the Australian Minerals Council's (AMC) Code for Environmental Management (WWF Australia 2000). This review does not deal with actual environmental performance, but rather the adequacy of reports. The assessment considered 32 reports out of 45 total signatories to the AMC's Code. The reports themselves do not contain consistent or detailed information on biodiversity. However, given that the mining industry has been a leader in environmental reporting, the sector's reports can be viewed as a benchmark against which future reporting across sectors can be assessed. Some key findings of the WWF review include that:

With respect to external verification and participation in corporate environmental management, an example has been set by BHP Cannington's invitation to the North Queensland Conservation Council (NQCC) to appraise the environmental performance of its operation (BHP/NQCC 2000). Utilising its own resources as well as engaging independent expertise, the Council assessed performance against legislative standards, stated corporate goals, and ESD principles as defined by the Council. The process and resulting evaluation are viewed by both the firm and the Council as improving transparency, establishing better understanding between the corporation and community, and supporting ongoing improvement of environmental performance. This collaboration sets an important precedent.

Other sectors

Environmental reporting is less common in sectors other than mining, and very often the relevance to biodiversity is less clear. Jeyaretnam et al. (1999) noted that the frequency and quality of Australian reporting are both lower than in Europe or North America, but that both are increasing.

Number of lending institutions considering biodiversity [BD Indicator 18.3]

Australia's biodiversity is used every day to support economic activity. The agricultural, pharmaceutical and forestry industries are just a few sectors of the Australian economy that benefit and profit from the use of biodiversity. Since virtually every industry relies on using, or having access to, biological resources, it is in the best interests of industry to ensure that the supply of those resources is not diminished or destroyed.

In Australia, several institutions and businesses now provide environmentally responsible investment advice and investment funds that support a diverse range of activities including regional reafforestation programs, land rehabilitation, native vegetation protection and regional ecotourism. As a result of concerns regarding the environmental damage done in Papua New Guinea to the Ok Tedi and Fly Rivers by BHP's Ok Tedi copper mine, shareholders in BHP have formed a group known as 'BHP Shareholders for Social Responsibility' to encourage socially and environmentally responsible codes of corporate practice. BHP Iron Ore has developed its EMS in accordance with the international standard ISO 14001.

If governments and business are to be 'part of the solution' rather than 'part of the problem' in the push for sustainable development and biodiversity conservation, then their governance and day-to-day activities need to reflect this role. Progressive businesses, for example, would be expected to adopt and implement environmental codes of practice, and to ensure that their investments were environmentally sound and consistent with sustaining biodiversity (Gasser & Cocker 2000).

Since investors increasingly try to objectively assess the environmental performance of companies when making investment decisions, Westpac and Monash University have introduced the Eco Index. This is Australia's first index of share price performance for leading eco-rated listed companies and is intended to identify better environmental performers on a relative basis. As at 31 July 2001, the index contained 82 companies from 24 sectors (Westpac 2001). Analysis of the performance of these companies suggests that good environmental performance need not hinder economic performance, even under the current legal and policy framework.

Lending institutions such as banks and superannuation funds provide much of the investment capital for business in Australia. The way these funds are used can benefit biodiversity and support its conservation, or degrade and destroy it. Hence, lending institutions can contribute to good environmental and biodiversity outcomes in Australia if the principles by which they are prepared to loan money strongly reflect these needs.

Ethical investments

As yet, few lending institutions have adopted biodiversity conservation as a primary principle or criterion for lending. Instead, several lending institutions and the companies in which they invest have adopted principles for socially responsible investment (SRI). SRI may be driven by perceived financial advantages to companies that invest in this manner, by ethical reasons or by the so-called 'triple bottom line' (i.e. good financial, environmental and social outcomes). Some entities such as Australian Ethical Investments (AEI) Limited, which commenced in 1986, and Australian Ethical Superannuation have been operating using a SRI framework for over 10 years. AEI is owned by around 100 shareholders who share the aims and aspirations of the Australian Ethical Charter (Table 69) which guides the investment of funds. The Charter supports outcomes such as the preservation of endangered ecosystems and the development of sustainable land use and food production, and avoids investments that may unnecessarily pollute the land, air and water.

Table 69: Ethical investment charter
The Australian Ethical Charter seek out investments which provide for and support the:
development of worker participation in the ownership and control of their work organisations and places
production of high quality and presented products and services
development of locally based ventures
development of appropriate technological systems
amelioration of wasteful or polluting practices
development of sustainable land use and food production
preservation of endangered ecosystems
activities which contribute to human happiness, dignity and education
dignity and well-being of non-human animals
efficient use of human waste
alleviation of poverty in all its forms
development and preservation of appropriate human buildings and landscapes.
Avoid any investment which is considered to unnecessarily:
pollute land, air or waters
destroy or waste non-recurring resources
extract, create, produce, manufacture, or market materials, products, goods or services which have a harmful effect on humans, non-human animals or the environment
market, promote or advertise, products or services in a misleading or deceitful manner
create markets by the promotion or advertising of unwanted products or services
acquire land or commodities primarily for the purpose of speculative gain
create, encourage or perpetuate militarism or engage in the manufacture of armaments
entice people into financial overcommitment
exploit people through the payment of low wages or the provision of poor or unsafe working conditions
discriminate by way of race, religion or sex in employment, marketing, or advertising practices
contribute to the inhibition of human rights generally.

Source: after Australian Ethical Investment (2000).

Since the mid-1990s, many more lending institutions have begun to give attention to environmentally responsible investments including those consistent with biodiversity conservation. For example, the Hunter Hall Trust is the largest ethical fund in Australia. Its investment policy restricts investment in companies that derive profits from alcohol, tobacco, armaments, gambling, destruction of the environment or cruelty to animals. The Trust also donates 10% of performance fees to charities that support good environmental and biodiversity conservation outcomes. The HESTA Superfund has developed an 'ecopool', allowing members to invest a portion of their superannuation into cash and shares of companies listed on the Australian Stock Exchange that have been screened for environmental performance. AEI Ltd supports a number of trusts, including the Australian Ethical Equities Trust, which provides a service that has been taken up as an investment choice by the Credit Union Superannuation Fund. Quadrant Superannuation Fund offers an ethical investment strategy in a choice of five options, which commenced in July 1997, while the Health Employees Superannuation Trust of Australia offers an environmental screened investment strategy in a choice of options that commenced 1 February 2000.

The Bendigo Bank recently commenced an alliance called The Ethical Investment Trust, which is a Community Aid Abroad initiative. The fund is offered exclusively through and managed by the Bank. Investments are required to be beneficial both socially and environmentally, and all proceeds are distributed to Community Aid Abroad. Earth Sanctuaries Limited offers investors the opportunity to directly and principally support biodiversity conservation goals. This publicly traded company establishes safe areas or sanctuaries for the introduction of rare and endangered Australian wildlife that have declined or become regionally extinct as a result of European activities on the Australian continent. UniSuper, the major superannuation fund for Australian universities, has recently tested the interest of members in an ethical investment option.

Estimates of the total amount of ethical investment funds in Australia vary greatly, but may approach $1 billion. This range compares to an estimate of US$350 billion for similar investments in the United States economy (Gasser & Cocker 2000). Whatever the true amount, investments of this kind in Australia are modest in the context of the billions of dollars managed by national lending institutions. Even so, this situation has the potential to change rapidly as commercial and ethical concerns and policy changes give enhanced prominence to environmental sustainability and biodiversity conservation.

Philanthropic funding

In addition to the investment funds managed by these lending institutions, many philanthropic groups and trusts regularly donate and provide very important funds and significant support for biodiversity conservation and research. For example, the Westfield Trust allocates $2 million per year in six key areas of community development including heritage conservation. The Myer Foundation provides vital funding such as the recent $1 million donation to CSIRO for research on the role of essential ecosystem services for humanity.

The Australian Bush Heritage Fund has, as a result of a generous bequest, acquired a 59 000 ha property (Carnarvon Station adjacent to the Carnarvon National Park) in southern Queensland that encompasses seven regionally endangered ecosystems, while Birds Australia have recently acquired 'Newhaven', a large and biologically rich pastoral property in central Australia. The Victorian Trust for Nature has supported biodiversity conservation across a range of ecosystems in Victoria and provides funds for research on rare and endangered species across this region. In Western Australia, the Lotteries Commission, through the Gordon Reid Foundation, makes available a portion of its tax revenue for investment in good environmental outcomes at the community level. It is able to do so because conservation is deemed a 'charity'.