Sustainability claims for international markets

ACF survey responses to the Assuring agricultural sustainability claims discussion paper v1.0

The Australian Conservation Foundation welcomes the opportunity to respond to the discussion paper on Assuring agricultural sustainability claims. Noting the extremely limited consultation process to-date, ACF strongly recommends

Consultation question 1: What other current and emerging regulatory requirements are missing from Section Error! Reference source not found.?
Please include in your response which markets and/or sectors the requirements apply to.

The text mentions company level sustainability targets which are not regulatory in nature however these are not addressed specifically in the discussion paper. This question would better serve the ag industry if it included a focus on supply chain and finance sector commitments and barriers in addition to regulatory barriers.

European Union
The discussion paper acknowledges the influence the EU’s Green Deal is having on sustainability-related regulations in the EU that impact suppliers of goods imported to the EU directly, and indirectly influences Australian exports to other markets due to the so-called ‘Brussels effect’ whereby markets in Asia tend to follow the EU.

It is incomplete to characterise the EU Green Deal as focused on achieving carbon neutrality in the EU as the Green Deal’s implications for sustainability are much broader. For example, a key plank of the Green Deal is the EU Biodiversity strategy for
2030 which outlines the EU’s commitment to the Kunming-Montreal Global Biodiversity
Framework (GBF) and to halt and reverse loss of biodiversity.

The EU deforestation regulation (EUDR) restricts the importation of products linked to properties where deforestation has occurred and is intended to address both greenhouse gas emissions and sequestration and biodiversity loss, and to contribute to forest restoration.

The EU’s Corporate Sustainability Reporting Directive (CSRD) places significant non- financial sustainability reporting obligations, beyond climate, on thousands of companies including outside of the EU which will affect the sustainability data that
Australian agricultural producers need to collect in order to participate in EU value chains. This reportable information may be extremely broad and include data related to land use and system-change, invasive species impacts, interaction with key biodiversity areas (KBAs), volumes of water extracted from river systems and the state of those river
systems, raw materials use, and a variety of indicators of pressure or impact on ecosystems.

The EU Farm to Fork strategy and biodiversity strategy together also includes targets to reduce the impact of harmful chemicals which is likely to result in chemical limits or targets being placed on imported agricultural products, a theme linked to target 7 of the
GBF.

The Kunming-Montreal Global Biodiversity Framework
The Kunming Montreal Global Biodiversity Framework (GBF) agreed in Montreal in 2022 has been compared to the Paris Agreement but for biodiversity. Like the Paris
Agreement, it is expected that industry sectors will increasingly be reuired to demonstrate alignment with the goals and targets of the GBF. Specific indicators apply to each target and should be reviewed in the development of the next discussion paper.
Notably, Targets 2 and 3 to restore 30% of degraded land and protect 30% of ecosystems may lead to expectation that agricultural sectors demonstrate how they contributing to meeting the ‘30x30’ targets. Target 7 requires nations to reduce harmful impacts from pesticides and other harmful chemicals by 50% by 2030 which will have implications for agricultural export markets beyond the EU. While Target 10 requires a shift to sustainable agricultural practices such agroecology and regenerative agriculture.

Non-regulatory sustainability requirements should be prioritised
To account for all material sustainability-related barriers and opportunities to agricultural trade, the review should go well beyond an assessment of regulatory requirements to include company-level commitments and targets. These are likely to affect greater volumes of traded commodities than regulatory sustainability requirements. For instance, more than 6,000 companies have set corporate net zero targets using the Science-based Targets Initiative (SBTi).

SBTi not only requires food land and agriculture (FLAG) sector companies to set near-
(5-10 year) and long term (2050) net zero emissions targets aligned with limiting global temperature rise to 1.5C, it also requires FLAG companies to set mandatory deforestation commitments in line with the Accountability Framework Initiative (Afi).

The Accountability Framework Initiative is referenced by SBTi, Science-based Targets for
Nature (which should also be reviewed for the development of the next discussion paper), the Taskforce on Nature-related Financial Disclosures, the Greenhouse Gas
Protocol, the World Benchmarking Alliance and numerous other frameworks and agricultural sectors, especially forest risk commodity sectors, should expect to be asked to demonstrate compliance with its guidelines on deforestation and ecosystem, conversion.

Finance including GFANZ, Nature Action 100+, Finance for Biodiversity
ACF strongly recommends the working group review all core and additional metrics referenced in the TNFD Additional guidance for the food and ag sector updated in
January 2025 which contains guidance on reporting against land use change, pollution and a number of other impact drivers. Ultimately, businesses disclosing impacts are recommended to set targets to address those impacts which will lead to requirements that flow through to Australian agricultural producers.

UK and US restrictions on importation of products linked to illegal deforestation
In addition to the EU, the UK and US have or are in the process of implementing restrictions on the import of forest risk commodities linked to illegal deforestation.
Noting that substantial deforestation occurs in Australia either without referral under the federal EPBC Act (see the Craik review) or that is considered to be ‘unexplained’ and
‘potentially illegal’ according to QLD and NSW Statewide Landcover and Tree Studies
(SLATS), attention should be paid to encourage compliance with federal and state laws and producers should be prepared to demonstrate compliance.
Consultation question 2: Are you aware of other expectations for evidence (form or subject) that are not included in Section Error! Reference source not found.?

Please include in your response which markets and/or sectors the other expectations for evidence apply to.

The discussion paper notes that evidence from satellite imagery is required to meet the due diligence requirements of the EUDR. Noting that non-regulatory, market-led sustainability frameworks also require due diligence the situation is somewhat more complex than that, with sophisticated remote-sensing tools, including high resolution satellites and related tools like LiDAR, required to meet a variety of sustainability- related expectations. To monitor land use-change alone the tools needed will depend on the type of commodity, ecosystem, or productions system being monitored and in some cases ground-based data collection may be required.

For commodities with complex supply chains, evidence of chain-of-custody including disclosure of properties and facilities involved in the supply chain may be a requirement. For fisheries products temporal and spatial data, such as day and location of catch, may be needed and this is often provided by vessel-based monitoring devices.

Depending on the sustainability claims being made, assessing biodiversity integrity or impacts may require camera or human observation-based wildlife survey monitoring at regular intervals.

As mentioned, the working groups should pay particular attention to the TNFD sector guidance for food and agriculture companies, in particular the section on metrics, indicators and targets.

See also the Australian Conservation Foundation’s Future of Food benchmarking methodology.

Consultation question 3: What are the most common forms of evidence being asked for with respect to providing evidence to support sustainability claims?

Please include in your response which markets and/or sectors the common forms of evidence apply to.

Consultation question 4: What are markets expecting in terms of evidence to support compliance with regulations (e.g. demonstrating compliance with work related regulations)?

Please include in your response which markets and/or sectors the types of supporting evidence apply to.

Above all data and methodologies used to make sustainability claims need to be transparent and available for scrutiny by civil society, consumers, investors, and regulators. Third party verification of claims is recommended using transparent data
and methodology (not industry-led). ASIC and the ACCC should be able to verify claims readily. Impact data should be reportable transparently so that supply chains, investors, public can make sustainable choices, verify claims, and assess risk.

Consultation question 5: Who (e.g. which organisations/agencies) should play a role in assuring sustainability claims for Australian agriculture?

Please include in your response what role each organisation/agency you identify should have.

Consultation question 6: Do you agree that the topics listed in section 3.2 are critical for demonstrating sustainability claims across all markets?

Yes, with some improvements and additions:

• To keep up with evolving reporting demands, GHG emissions and sequestration should
be counted separately not in a net sense i.e. gross emissions and gross changes in
carbon stock or sequestration potential. And individual greenhouse gases should be
measured discretely i.e. carbon, methane, nitrous oxide etc should be monitored and
reported independently.

• Biodiversity should be considered as distinct from land use and land us-change e.g. the
Nature Positive Initiative is running a consultation process to develop or refine metrics
for demonstrating nature positive outcomes.
The International Union for the Conservation of Nature (IUCN) guidance for business
action on biodiversity recommends measuring and setting targets for ecosystem
integrity and extent, and extinction risk for threatened species, which can be reported
using metrics like STAR. Mean species abundance (MSA) may also be used or required
to demonstrate impact on species.

• Chemical use should be considered alongside harmful chemical impact on ecosystems
or biodiversity with e.g. the EU is focusing on impact outcomes rather than use rates or
efficiency.
• Nutrient loss is also featuring in business priorities for supply chain sustainability
measured in terms of not only use of nitrogen and phosphorous but also nutrients lost to
the environment through runoff and leaching (measurable in volume terms or as impact on
eutrophication) or through soil emissions after over-application of fertilisers or intensive
livestock production.

• Water extraction and pollution, impact on water basins, rivers, and waterways as opposed
to ‘water efficiency’

Consultation question 6a: What other topics would you consider to be critical for demonstrating sustainability claims?
Please include in your response which markets and/or sectors these topics apply to.

See answer to question 6 above – nutrients lost to the environment, chemical impact.

Also see TNFD targets and metrics guidance for the food agriculture sector. One of the features of nature related risk and impact assessment is that location specific-data is required to assess sustainability e.g. where is water extracted from, what is the state of the environment at sites impact by the supply chain or that the supply chain is dependent upon etc.

Consultation question 7: Are you aware of any current or emerging approaches to demonstrating evidence-based sustainability claims that should be considered in the next phase of this project (that are within scope)?

See responses to questions 1, 2, and 6 above.

Consultation question 7a: Please provide details including a link to further information, or the contact details for the entity responsible so we may reach out to them.

Consultation question 8: What challenges do Australian agricultural sectors face in providing the necessary evidence to satisfy international market demands?

Lack of consistent vegetation change data. Lack of consistent species data. Lack of data, including spatial data, on pollution levels and sources of pollution. Lack of transparency and traceability within agricultural supply chains. High cost of natural capital accounting and biodiversity assessments at farm scale.

Consultation question 8a: How can these challenges be overcome to ensure market access?

Natural capital accounting. A well-resourced environmental data collection agency such as Environment Information Australia tasked with measuring indicators relevant to supply chain sustainability. Subsidised access to farm-scale survey and assessment services e.g. farming for the future, agronomeye.

Consultation question 9: What existing datasets are you aware of that can be used to support sustainability claims?

Consultation question 10: Are there industry-specific datasets that should be prioritised?

Impact data in line with TNFD recommendations.

Consultation question 10a: Which industry-specific datasets should be prioritised?
Impact data in line with TNFD recommendations for the food and agriculture sector.

Consultation question 11: In what ways can existing data collection processes be improved to support strong and credible sustainability claims (without adding significant workload to farmers and supply chain actors)?

Information on product chain-of-custody including lifecycle traceability for livestock should be mandatory and presented transparently.

Consultation question 12: How do international markets assess the credibility and strength of the data provided to support sustainability claims?

No response

Consultation question 12a: What benchmarks or standards are used in this evaluation?

No response

Consultation question 13: What new data collection methods are needed to meet emerging market demands?

No response