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Today marks a major milestone for Australia with an agreement to pass the long-awaited environmental law reforms in the Senate. RIAA has long advocated for reforms to Australia’s environmental protection laws. The revised laws will provide much-needed certainty for institutional investors to make long-term, economically viable decisions.
In particular, RIAA commends the strengthened protections for native forestry and Australia’s precious natural capital as well as excluding the fast-tracking of coal and gas approvals.
RIAA’s Co-CEO Estelle Parker said: “Finally, investors will have the certainty of baseline environment protection laws that mitigate risks to investments which the degradation of nature in this country poses. Investors will be relieved once these changes are through. They will support the energy transition while helping to protect the nature services on which our economy depends”.
RIAA’s Nature Working Group was established back in 2021 and is driving investor leadership in considering nature-related risks and opportunities. By bringing together institutional investors, the group empowers them to consider nature in their stewardship responsibilities, as well as their operations and portfolios. These landmark reforms reinforce and amplify this leadership, enabling investors to better manage nature-related risks and unlock opportunities in Australia’s growing natural capital market.
Why does this matter for investors?
Nature underpins our economy: 49% of Australia’s GDP has a moderate to very high direct dependence on nature, in particular sectors like food, water, agriculture, mining, fisheries, construction and real estate - our economy won't thrive unless we protect the services that nature provides to these industries.
Nature loss costs our economy: We are destroying nature at a faster rate than it can replenish itself, including the Great Barrier Reef, which supports 64,000 jobs, $6.4B/ year, and the Murray-Darling Basin, which supports more than 30% of Australia’s food production.
Climate and nature are inseparable: Healthy ecosystems store carbon, regulate the atmosphere, and build resilience to extreme weather - the IPCC has ranked protecting intact ecosystems as the second most important climate solution after phasing out the use of fossil fuels. These laws will support Australia to deliver lasting climate outcomes, because the protection and restoration of nature is central to both mitigation and adaptation Australia’s own National Ecosystem Accounts show that in 2020–21, ecosystems stored over 34.5 billion tonnes of carbon, providing climate regulation services valued at A$43.2 billion.
Fast-Tracking Sustainability: These reforms will accelerate the approval of sustainable projects and streamline processes for essential infrastructure such as housing developments and renewable energy initiatives.
More than five years in the making, this is a big step forward and RIAA congratulates the Australian Government and those involved in passing these reforms for standing up for the environment and Australia’s economic prosperity.
But there’s still work to do
Climate pollution gap: The new laws do not allow the Minister to consider climate pollution when assessing projects – this gap must be addressed to avoid significant risks.
Implementation monitoring: The government needs to monitor how the law is applied to prevent loopholes that could weaken environmental protections, and continue to invest in protecting and restoring ecosystems
With strong baseline protections in place, investors must:
- Factor nature-related risks and opportunities into investment decisions.
- Address systemic risk of nature loss by investing in nature infrastructure and natural capital to support long-term economic resilience.
RIAA stands ready to work with government, business and investors to ensure these reforms deliver lasting benefits for nature, climate and our economy.
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