Who Pays for Resilience? Rethinking Natural Capital Finance in Australian Agriculture

Ebony Greaves
3 days ago
8 min read

Australian producers are under mounting pressure from climate volatility, market conditions, and growing sustainability expectations both domestically and internationally. At the same time, Australian landscapes are also under unprecedented strain from degradation and a changing climate - and so are the communities and industries that rely on them.

With more than half of Australian landscapes managed by farmers, the question is no longer whether natural capital matters, but how we design finance models that actually reward and incentivise farmers for looking after it. We can’t expect an already busy (and often debt ridden) farmer to go out of their way to plant native trees, engross themselves in regenerative practices and confront conventional farming methods without a ‘carrot’ so to speak. Supply chain players need to come to the table and pay for the externalities that are often not accounted for.

Progressive producers across the country are already experimenting with practices that improve groundcover, soil carbon, biodiversity and water management because they see the direct productivity and resilience benefits and because they know it’s simply good land stewardship, but it is often a bit of a risk to take the first step.

Financial institutions and supply chains are trying to figure out how to account for farmers that produce a better product and de-risk their land from climate change due to increased resilience and soil carbon. Government and NRM organisations are investing in programs that build natural capital capability and are investing in restoration across regions, but there is not a whole of landscape approach. As an example, it is difficult for one farmer to take care of their land, while neighbouring farms use extensive pesticides and pollute shared water resources.

Despite the great momentum, the scale is still not there. Accessing natural capital finance remains fragmented and difficult. There continues to be a major disconnect between farm‑level decisions and the capital flows that ultimately depend on healthy landscapes.

For too long things like soil, water and biodiversity have been treated as free inputs. When they become degraded, the default response has historically been more inputs, more engineering, and more degradation. Natural capital reframes this narrative by recognising that a healthy and resilient landscape is an asset that underpins farm and yield stability, nutritional value of food, supply chain stability, input efficiency, market access and farm valuations.

The problem with resilience

If resilience is a shared benefit, it must also become a shared investment. Resilience is often referred to as a personal attribute of farmers. We ask them to “pick their boots up” and absorb the financial and emotional toll of prolonged drought, bushfires, flooding, input volatility, biosecurity events and shifting customer demands. Then we celebrate their ability to bounce back as if resilience is an easy to come by, free resource.

The recent widespread bushfires across Victoria in January provide a good example. More than 400,000 hectares of agricultural land and wildlife habitat burned, more than 45,000 deceased livestock, and the loss of nearly 1,000 homes and structures. A month later, you would have a difficult time finding news articles about it. Emergency services have moved on. People have moved on. The media have moved on. Farmers are left putting their boots on, picking up the pieces, and digging deep into their resilience reserves to rebuild their lives and continue putting food on people’s tables.

Genuine questions emerge - what role should supply chains have in building resilient farms and landscapes that are able to bounce back from impacts such as bushfire? Should they be mandated to invest in the supply chain they rely so heavily on?

This week, I saw two posts from agricultural mental health workers in my LinkedIn network - calling out how overused and misdirected the word “resilience” has become. Their words really hit home.

Steph Shmidt said “We don’t get to opt into resilience. It’s forged by necessity. Resilience language can quietly shift responsibility onto individuals while the systemic pressures remain untouched”.

Warren Davies said “Resilience can f#&k off. We throw that word around like it fixes everything. The real question isn’t how resilient we are, it’s how strong our capacity before the next crisis is. The cameras will leave again. They always do. And when they do, resilience alone won’t save us. Capacity will”.

In reality, individual resilience is being stretched thin by risks and impacts that sit largely outside the farmer’s control. We seldom talk about resilience as a shared capability of the entire supply chain, when we really should. When it comes to natural capital and landscape health, the burden of resilience often sits predominantly with farmers, while the rest of the supply/value chain is free riding on their capacity to carry risk and recover from impacts.

Australia's natural capital landscape

Australia has a number of existing natural capital finance models such as the ones highlighted below. They all represent progress and real opportunity – but together they also highlight a critical gap: scalability and accessibility for everyday farmers.

Environmental markets (carbon, biodiversity, nature-repair): These markets create tradeable units and pay farmers and landowners for measured and verified outcomes on their land. These markets often appear to be more accessible to large farms and agribusinesses rather than small to medium sized farms due to the high costs of project development and verification, and the high level of complexity and financial risk exposure. Despite barriers that might deter some farmers, some smaller farms do participate in these markets through partnerships with carbon project developers.

Natural capital accounting and green lending: In recent years, natural capital accounting has been re-shaping how on-farm decisions and risk are understood more broadly in agriculture. By quantifying ecological health (ground cover, soil health, tree cover, biodiversity, water resources etc), financial institutions are now beginning to see natural capital as a driver of business resilience and therefore a reduced investment risk. Some Australian financial institutions are piloting green or sustainability-linked loans and integrating natural capital indicators into their risk models. Examples include Commonwealth Bank, Rabobank, and Achmea Farm Insurance.

Institutional investment: In some instances, large investors are acquiring or partnering on agricultural land to deliver natural capital outcomes (typically focused on environmental markets i.e. carbon). These investments no doubt mobilise significant capital, however, the benefits are also typically limited to a small group of owners/investors rather than at a whole of landscape scale.

NRM-led programs: NRM groups, landcare groups, catchment groups and government programs have long been playing a vital role in co-funding land management practices and environmental outcomes such as riparian protection, shelterbelts, erosion and weed control, and soil health. The ability to coordinate action at a catchment scale has been a significant strength of these programs, however, there is a significant reliance on short funding cycles and access to public funds, with limited integration to supply chains or financial markets, and difficulty sustaining outcomes once project funding ends.

These models show genuine progress. But without mechanisms that operate at true landscape scale, and that are simple enough for most farmers to access, progress will remain slow, outcomes will remain isolated, and natural capital finance will remain out of reach for many who need it most.

A vision for natural capital in Australia: If resilience is a shared benefit, it must also be a shared investment

Resilience is often framed as “what good farmers do” when it should also be framed as “what responsible buyers and financiers pay for”. The same investments that make landscapes more resilient and farms more productive, also make supply chains less volatile and more reliable.

Supply chains cannot continue to outsource risk management to the farm while focusing their own efforts on short‑term procurement strategies. They need to co‑invest directly in the natural capital and landscapes that underpin their security of supply through long‑term, place‑based partnerships.

This is where models like the European Landscape Enterprise Networks (LENs) are so compelling. LENs hard‑wires this principle into contracts and trades by making resilience a line item in corporate budgets rather than an unpriced expectation placed on farmers. Landscape Enterprise Networks (LENs) is a model that makes resilience investable by:

Bringing together multiple corporate buyers in a region who share exposure to landscape risks such as soil degradation, water quality, flood risk, biodiversity loss and climate volatility;
Identifying the specific landscape functions these buyers need to secure - for example, stable yields of a particular commodity, reduced flood risk for infrastructure, better water quality for processing plants;
Translating those needs into practical, regenerative land management actions that local farmers can implement such as improving groundcover, diversifying rotations, enhancing riparian zones, or increasing tree cover and shelterbelts; and
Structuring multi‑party trades where buyers co‑fund these actions through direct payments to farmers, linked to agreed performance indicators.

Crucially, the LENs model does not rely on public funds, with investment coming predominantly from buyers whose core businesses depend on the landscape. LENs focuses on stacked environmental outcomes across soil, water, biodiversity and climate, functioning at a whole of landscape scale and giving small and medium sized farms a seat at the table.

In Europe, LENs has channeled more than $50m AUD of private capital into regenerative practice changes across tens of thousands of hectares, involving 350 farms and a wide range of funders reliant on the shared landscapes. LENs has shown that when landscape risks and dependencies are made visible and shared, buyers are willing to invest – provided there is a trusted intermediary to broker fair, transparent deals.

SEAOAK’s partnership with 3Keel and Landscape Enterprise Networks

We have watched for years as Australian farmers grapple with the complexity of environmental markets and the limitations of short‑term programs. We have seen the promise and the frustration of pilots that never scale, and of models that look elegant in theory but consistently fall over at the point of implementation.

This is why SEAOAK has become the Australian partner of UK-based sustainability advisory firm 3Keel, and the Australian Operator of Landscape Enterprise Networks.

We're excited about bringing the world-leading global model to Australia, which is significantly different to our existing environmental markets and natural capital finance models.

We do not see LENs as a replacement for other natural capital finance models in Australia. Rather, we see it as a complementary model that complements, rather than displaces, existing initiatives:

Drawing on the evidence base from natural capital trials and accounting work
Sitting alongside environmental market projects, not competing with them
Helping investors across the supply and value chain channel capital where it can have the greatest impact

From fragmented pilots to enduring partnerships

We believe natural capital (along with population growth, tarrifs, climate and global politics) will define the next decade in Australian agriculture. Natural capital finance is the mechanism that will determine which landscapes, industries and supply chains thrive in an era of escalating risks and expectations. The risk is that we continue to exhaust farmers by disproportionately pushing the responsibility for sustainable land management and landscape resilience onto them, or we continue to roll out programs that can never scale beyond an initial place-based pilot.

As CEO of SEAOAK, my conviction is simple: the most successful natural capital models will be those that can scale across entire landscapes and regions, respect farmers’ time and expertise, reflect the reality of local landscapes and environmental challenges, and give buyers and financiers a credible, collaborative way to invest in the landscapes they rely on.

SEAOAK’s partnership with LENs offers a proven, scalable pathway to make landscape resilience a shared investment, not a solo burden on farmers. Whether you're a producer seeking simpler access to landscape-scale funding, a supply chain leader ready to co-invest in the natural capital and landscapes your business depends on, or a financier looking to back systemic change, we'd welcome the conversation.