Green Shoots Report: Understanding the nature-positive business opportunities for Australia

A$298 billion of annual commercial opportunities by 2035 if businesses prioritise nature, says Cyan Ventures

• Report finds putting nature first is good for business and economic resilience
• Nature-positive solutions could create A$298 billion of annual value in 2035, which would support 1.6 million direct jobs at this time.
• A$70 billion in annual capital investment will be required to support the business opportunities identified.
• While over a third of opportunities have high potential returns (>12% IRR), there are challenges related to information failures, multi-sector coordination, managing potential trade-offs, and developing targeted policy mechanisms reflecting the maturity of each opportunity.

Nature is declining at an unprecedented rate, with nearly 1 million species at risk of extinction because of human activity. The consequences are just as alarming for business as they are for the environment due to the dependence of most sectors of Australia’s economy on nature and its services. However, it is not all bad news. A nature-positive approach that protects and restores Australia’s biodiversity could create large new business opportunities.

To better understand these opportunities, Cyan Ventures has developed research to understand the business and investment opportunities in Australia associated with a nature-positive approach. The research builds upon global research led by Cyan Ventures Managing Partner Dr. Fraser Thompson with the World Economic Forum by taking an Australia-specific focus. The research was officially released during the Global Nature Positive Summit in Sydney on 9 October 2024.

The report examines business and investment opportunities in three key areas or systems of the Australian economy:

1. Food, land and ocean use

2. Infrastructure and the built environment

3. Energy and extractives

Food, land and ocean use: What we eat and grow makes up around A$96 billion of Australia’s gross value added and employs over 500,000 people. Nature-positive solutions can create A$118 billion of revenue or cost savings in 2035. Here are some examples:

• Eco-tourism: The global eco-tourism market is projected to grow at a compounded annual growth rate of 12%, driven by increasing environmental awareness and rising demand for sustainable travel options. This could be a A$22 billion annual opportunity for Australia by 2035.
• Technology in large-scale farms: New precision-agriculture technologies such as farm-management software and big data analytics can improve planting and harvest cycles, and have the potential to increase yield rates in large holder farms by up to 30% (helping to reduce requirements on opening up new land for agriculture).

Infrastructure and the built-environment: About 40% of global GDP comes from the environment we build – office buildings, homes and transport. Nature-positive solutions can create A$84 billion in additional revenue or cost savings in 2035 in Australia, and support around 500,000 direct jobs. Here are some examples:

• Modular buildings: Modular buildings are constructed using pre-fabricated sections or modules that are manufactured off-site and then assembled on-site.Modular construction can reduce waste materials like timber, cardboard, plastics, and concrete by up to 90% compared to traditional construction methods. The addressable market for modular construction is estimated at roughly 25% of new residential and commercial buildings in Europe and the United States, with the cost savings in the order of 10% of traditional construction costs. This could be a A$4 billion opportunity in Australia in 2035.
• Rethinking underutilised car parking: In Melbourne, a study identified nearly 50% of on-street car spaces were redundant. With car sharing, and better public transport, this number could increase. Repurposing this land for alternative uses such as green spaces and community activities, like in cities such as Barcelona, could unlock A$1 billion of annual value in 2035.
• Smart sensors: Reducing municipal water leakage could save A$1 billion in 2035. Return on investments in water efficiency can be above 20%.

Energy and extractives: The energy we produce and what we extract accounts for almost a quarter of global GDP and employs around 500,000 people in Australia. With energy demand growing, there is an opportunity to create A$96 billion in business opportunities in 2035 and support over 600,000 direct jobs. Here are some examples:

• Nature-positive renewable development: Land for renewable energy projects are three to 12 times the size of coal-powered ones. Some companies are rethinking development approaches to combine them with nature-positive solutions. In the Netherlands, developer Vattenfall has incorporated openings in offshore wind turbine foundations to allow fish movement and added rocks that serve as habitat and promote marine biodiversity. In France and the U.S., solar farms have been co-located with vineyards, where the shade provided by the panels helps reduce water evaporation and protect crops from extreme weather
• Mining and resource extraction: New technologies and more mechanization could enhance material recovery rates by up to 50%, creating a A$9 billion annual opportunity in 2035.

Quotes from authors on the report

“Biodiversity threats are increasingly becoming a core concern to businesses across every sector of the Australian economy and so-called ‘business-as-usual’ is not an option,” said Fraser Thompson, Managing Partner of Cyan Ventures. “The good news is that our research shows there is a really sizeable business opportunity from a nature-positive approach”.

“We are facing a massive information failure when it comes to nature investment. Unfortunately, only 20% of the nature-positive opportunities we identify have a strong focus by businesses and investors today” says Bridget Holloway, report co-author.

“We need to completely shift our mindsets to capture these opportunities – at the moment, the focus is on regulating against risks – we need to think about how policy can enable businesses and investors to go after these opportunities” says Fraser Thompson.

Link to full report.