Agriculture at the cutting edge of impact measurement

One of the challenges of incorporating biodiversity considerations into business is measuring impact in a way that finance can interpret. The agricultural sector is at the forefront of developments in this space.

HOGG How is improvement of the environment from sustainable agriculture measured?

MURPHY There is a series of different methodologies that apply different strengths. One is change of practice. With reef water credits, for example, there is variable-rate fertiliser use versus comprehensive fertiliser use. If a user can prove it, they will know through the change in practice that there is a benefit that can be defined.

Change of practice measurements are a good first step and it is possible to see this in biodiversity. If a user implements improved area management practices onto an area of land, it will be in a better place tomorrow than it is today.

It becomes more complicated with soil carbon methodology. We have some way to go before we can apply this methodology to several terrains and consistently say the measurement is where it needs to be.

Through certain change-of-practice methodologies, proof of delivering a practice change can provide definable, auditable improvement. It becomes more technical in other methodologies, particularly when we get to soil carbon.

There is the potential problem of standardisation missing the mark because of our fragmented systems of production across an enormous geography. But the lack of standardisation can also create bigger problems and increase cost.

MARK BENNETT ANZ

HOGG All this methodology development needs to be financed, and this is the crux of the problem. Investors need methodologies to understand whether their investment or the step-change plan is making a difference, and this is where there is a gap.

From a research perspective, we can develop all the methodologies. But we need access to funding that we no longer have after the Australian government reduced Australian Research Council funding.

We are constantly asked to evaluate return on investment and our response is that we are developing something that can be used. But, in the short term, users need to pay for it – before there is any return on investment. The challenge is bridging this gap.

In Australia, we do not do investment into translational science very well – and this is why we find ourselves where we are. In Europe and in North America, there is investment in translational science for benefits and outcomes that are not immediately tangible.

Despite the risk associated with this, the investment is still made because investors can see the direction in which it is going. This is the part I would like to see changed in Australia, but frankly I don’t know how we are going to get there.

GRAY We need to come up with methodologies that are attractive to the private sector. For example, how we can use remote sensing to deliver speed and scale rather than having people being out in the field manually counting.

BENNETT Australia is a mature and developed economy where technology improvements in agriculture are continually sought and adopted. This is of course part of the problem in developing countries, where people need to be actively engaged and occupied in work.

There is a lot of public money and farmer-funded levy research going on. There is barely a commodity group here that doesn’t have a sustainability programme in place. We require living and learning in an effort to come up with not only a framework that we believe is better but one that everybody adopts as acceptable.

On greenwashing and the costs of red tape and bureaucracy, referenced elsewhere in this discussion, we don’t want to see industries satisfying standards to suit a single purpose only to find that, as we enter into a global trade environment, they have to start all over again because international jurisdictions do not agree with the way we arrived at our environmental credentials or net zero position.

There is the potential problem of standardisation missing the mark because of our fragmented systems
of production across an enormous geography. But lack of standardisation can also create bigger problems and increase cost.