Q&A: Making nature reporting practical for sheep producers
What does nature-related financial reporting mean for Australian sheep producers, and how can the industry ensure it doesn’t become another costly and complicated exercise?
These were among the questions explored by Australian National University (ANU) intern Tracey Pike as part of Sheep Producers Australia’s Green Sheep Project.
Tracey examined the Taskforce on Nature-related Financial Disclosures (TNFD), translating 549 pages of technical guidance into two practical resources designed to help sheep producers understand the framework and how it could apply to their businesses.
Drawing on her upbringing on a sheep farm and 20 years working in corporate and government organisations, Tracey set out to make a complex reporting framework more accessible to producers.
What is TNFD and why is it relevant to sheep producers?
TNFD is a voluntary international framework designed to help businesses and financial institutions identify, manage and report on their nature-related risks and opportunities.
While it is primarily aimed at larger organisations, its whole-of-supply-chain approach means sheep producers may increasingly be asked to provide environmental information to banks, processors and other businesses.
“The TNFD is voluntary, and it’s designed to assist corporates and financial institutions to manage and disclose the risks and opportunities occurring within their value chain,” Tracey explained.
She said producers could benefit from understanding emerging reporting expectations before they became more widespread.
What are the biggest barriers to adoption?
Tracey identified several challenges, including the complexity of reporting requirements, the cost and time involved in collecting information, and uncertainty about how producer data could be used.
“The rapid changes occurring in the ESG (environmental, social and governance) space discourages producers from getting involved until there’s either a sense of more stability or the requirements [are] mandated,” she said.
Producers also face the prospect of collecting similar information for multiple reporting schemes, without a clear financial return or market incentive.
Concerns about data ownership and sovereignty were another important finding, particularly where information could potentially be used for benchmarking or regulatory purposes.
Where should producers start?
Tracey said producers did not necessarily need expensive new systems or extensive environmental assessments to take their first steps.
“I think the really obvious answer is even if it’s not written down in your business plan yet, thinking about what data you already know about your property,” she said.
“Most people can tell you more detail about their property than their TNFD would ever ask for.”
Existing farm maps, property boundaries, water resources and management records could provide a useful starting point.
She said documenting information already available could help producers identify what additional data might be valuable to collect over time.
How can the industry avoid adding another reporting burden?
Tracey said consistency across reporting frameworks would be important to minimise duplication and make environmental reporting more practical.
She highlighted Australian Wool Innovation’s Woolmark+ program, which is developing common environmental metrics that could potentially support multiple reporting requirements.
“They’re really looking at how those metrics can work across different ESG frameworks and also how it could work across different businesses,” she said.
Tracey also highlighted the importance of producers retaining control of their information and choosing digital tools that allow data to be extracted and transferred between systems.
What did your internship project deliver, and what’s next?
Tracey developed three resources: a report outlining her research and approach, a two-page introductory guide explaining TNFD to sheep producers, and a more detailed technical guide.
The technical guide breaks down TNFD’s LEAP approach – Locate, Evaluate, Assess and Prepare – with practical explanations and examples relevant to sheep enterprises.
However, Tracey stressed that the resources still needed to be tested with producers.
“One of the things that we haven’t done within this space yet is actually road test it with sheep producers to see how we can develop it better for people,” she said.
Her research provides a useful producer resource for the Green Sheep Project as it works to help producers navigate emerging sustainability expectations, reduce unnecessary reporting duplication and demonstrate their environmental credentials.
About the Green Sheep Project
Led by Sheep Producers Australia, the Green Sheep Project is working with regional partners to develop practical tools and resources that support sheep producers to improve productivity, manage natural capital and demonstrate environmental sustainability.
