Australian insurers urged to adopt nature-positive practices

In December 2022, over 180 countries adopted the Global Biodiversity Framework.

The insurance industry, which manages financial risks and provides recovery mechanisms for natural disasters, is directly impacted by nature loss and climate change. Especially with more than half of the global economy, equivalent to $44t, depending on nature.

In Australia, natural capital is in decline, with 10 out of 18 ecosystems at risk of collapse. Biodiversity loss and ecosystem collapse are emerging as major threats over the next decade, according to the Insurance Council of Australia (ICA).

Governments and financial institutions are increasingly recognising the need to restore nature. 

In December 2022, over 180 countries adopted the Global Biodiversity Framework at COP15 in Montreal, aiming to reverse global nature decline. 

This signals that insurers must adapt to the nature-positive transition, embedding nature considerations into their underwriting and investment strategies.

Internationally, nature-based solutions are helping insurers mitigate risks associated with climate change by protecting insured assets. 

In Australia, insurers have the opportunity to advance nature-positive practices, addressing the challenges posed by climate change and nature loss.

The next decade offers a crucial window for action, and Australian insurers are encouraged to take proactive steps, even in the absence of fully developed regulatory frameworks, to facilitate the transition toward a more resilient, nature-positive future, the ICA emphasised.