Biodiversity and the demand for climate action
Biodiversity is the variety of life on Earth, encompassing everything from genes and bacteria to entire ecosystems like coral reefs and forests.
Since European colonisation, Australia’s rich biodiversity has experienced large and rapid decline. Over half of Australia’s forest and bushland have been permanently destroyed, replaced or are now classed as degraded. Forest loss is a major driver of climate change.1
Estimated Change to Australian Forest Area Since European Settlement2
This clearing has led to accelerated species extinction across the country, with extinction rates for mammals in Australia far exceeding global averages.3 According to the United Nations, the planet is in the sixth mass extinction, with up to one million species at risk of extinction globally – and Australia’s contribution to this is outsized.4
Compounding the issue, Australia has some of the highest per capita carbon emissions in the world. Our emissions profile is leading to an increase in the frequency of extreme weather events, poorer air quality, warming oceans and impacts to health and wellbeing.
The role of investment in biodiversity
Investors have a variety of options to address climate change and biodiversity loss. At a corporate level, investors can implement policies and strategies to govern their own operations and influence their portfolio companies, assets and service providers, for example by encouraging voluntary disclosures, reporting and achieving climate neutral status. They can also invest in funds who directly invest in or manage projects that address climate change and biodiversity loss.
One of the challenges investors face when investing for biodiversity outcomes is that there are inherent trade-offs – there are currently limited opportunities to invest in high-integrity nature projects with experienced partners, that also deliver a market-rate financial return.
Case studies
Conscious Investment Management (“CIM”) is seeking to address this challenge by providing financing for land acquisition in key areas of environmental vulnerability and planting new native forests with diverse, climate resilient species.
In May 2024, CIM partnered with leading not-for-profit biodiversity and restoration group, Greening Australia, to deliver biodiverse environmental planting projects across Australia. Under this partnership, CIM (through its managed funds) provides financing to Greening Australia to acquire property and develop carbon farming projects which support decarbonisation and long-term biodiversity outcomes.
CIM’s first investment alongside Greening Australia involved financing the purchase of a 755-hectare property in Southern NSW, known as ‘Caddigat Road’, with plans to plant approximately 140,000 native trees and shrubs on the property from 2025.
Caddigat Road is located in the Snowy Monaro region of Southern NSW, approximately 2.5 hours south-west of Canberra. Typical Snowy Mountains sheep grazing country, the area has a legacy of clearing and has piqued the interest of universities and local and state governments due to its alarming signs of biodiversity loss and vulnerability.
Restoration of the property is designed to benefit several nationally listed woodland bird species and will contribute to the recovery of the critically endangered Monaro Tableland Cool Temperate Grassy Woodland vegetation community (see examples of these threatened species and targeted planting species below).
Images top row (from left to right): Scarlet Robin, Speckled Warbler, Mauve Burr-daisy, Snow Gum (Eucalyptus pauciflora), Dagger wattle (Acacia siculiformis). Bottom row: Diamond Firetail, Southern Whiteface, Dusky Woodswallow, Blackthorn (Bursaria spinosa), Weeping Snow Gum (Eculyptus lacrimans).
The planting design focuses on diverse native species endemic to the area with the goal of supporting conservation of native wildlife by creating and connecting habitat across the landscape. Long-term climate resilience is also a key consideration.
The property has been successfully registered with the Clean Energy Regulator (“CER”) as an Environmental Plantings (“EP”) project with a 100-year permanence period. Greening Australia will act as landowner and project developer. CIM has provided innovative financing for the project, with repayments linked to the generation and sale of Australian Carbon Credit Units (“ACCUs”). Once fully planted, it is estimated that the Caddigat Road carbon project will sequester ~300,000 tonnes of CO2e over the project’s life.5 This is equivalent to the energy required to power 36,550 homes for one year.6
In early 2025, CIM invested in its second biodiverse EP project, by providing financing to Greening Australia to complete the acquisition of a 3,313-hectare property in South Australia, known as ‘O’Kiltabie’. Greening Australia is now working to register the property as an EP project with the CER, with plans to plant approximately 900,000 native trees and shrubs on the property. CIM has also agreed to provide financing to support the biodiverse plantings on the site in 2026 and 2027.
Restoration of O’Kiltabie is designed to contribute to the recovery of the EPBC-listed, Critically Endangered Drooping Sheoak Grassy Woodland on Calcrete ecosystem, and to benefit several threatened bird and mammal species (see examples of these species below).
Images (from left to right): Malleefowl, Pygmy Possum, Sandhill Dunnart, Southern Hairy-Nosed Wombat, Example of a Sheoak Grassy Woodland
As with Caddigat Road, Greening Australia are seeking to register this biodiverse EP project with a 100-year permanence period, to support long-term restoration outcomes.
Images (from left to right): ‘Caddigat Road’ (Credit: Richard Snashall), Natural regeneration at O’Kiltabie
In addition to investing in projects with direct biodiversity outcomes, CIM also invests in projects that support Traditional Owner land ownership and land restoration. In 2023, CIM partnered with Traditional Owner group, the Kullilli Bulloo River Aboriginal Corporation (“KBRAC”), and carbon farming service provider, Climate Friendly, to acquire and regenerate a piece of land with substantial cultural significance to the Kullilli People. The landmark property acquisition was secured through an innovative finance partnership underpinned by carbon farming.
These high-impact carbon projects aim to drive financial returns while protecting biodiversity loss and, for the investment with KBRAC, also providing First Nations co-benefits.
Conclusion
Biodiversity loss is a significant risk to Australia and the world, with the World Economic Forum ranking “biodiversity loss and ecosystem collapse” as the third highest threat humanity will face in the next 10 years.7
One of the challenges with investing for biodiversity is that there are inherent trade-offs – nature doesn’t have a financial value, so biodiversity investments might not meet return hurdles, meaning few investment opportunities exist.
CIM’s partnership with leading not-for-profit biodiversity group Greening Australia, delivers biodiverse EP projects across Australia and uses the Australian carbon market to support investor returns. With the ongoing support of our investors and impact partners, CIM will continue to invest in projects that help restore and protect biodiversity across Australia and reduce our collective impact on the plant.
1. Australian Bureau of Agriculture and Resource Economics (2012) Vegetation Assets, States and Transitions—2008 dataset.
2. Atlas of Australian Resources – Vegetation’, 1990, Commonwealth of Australia (Carnahan); Australia State of the Forests Report (2018).
3. Biodiversity Council Australia, How do we know Australia is in a biodiversity crisis (Jan-24); Sarah Legge et al., Loss of terrestrial biodiversity in Australia: Magnitude, causation, and response. Science (2023)
4. United Nations; UN Report: Nature’s Dangerous Decline ‘Unprecedented’; Species Extinction Rates ‘Accelerating’.
5. These metrics are targets of the impact of the project over the life of the carbon project. There can be no guarantee that these forecasts will be achieved.
6. https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator#results
7. https://www.weforum.org/stories/2024/01/global-risks-report-2024/