The perils of making a "nature positive" claim

Corporate claims of 'nature positive' status for products and services, in brand 'halo' advertising for a company or in formal corporate disclosures, are increasingly tempting as global awareness of the term ramps up. But succumbing to the siren's call by making a bare 'nature positive' claim carries significant legal and reputational risk for Australian companies.

It is possible to imagine that a corporate actor could, through its actions (or inactions) contribute to outcomes which are verifiably 'nature positive', but it seems difficult to imagine that a company could accurately describe itself simply as 'nature positive' in a confidently verifiable way.

Without clear definition and lacking any universally accepted standard, criteria or benchmarks, the term 'nature positive' remains ambiguous so that any bald assertion of being 'nature positive' as a company is not only bald, but bold, almost inevitably likely to be characterised as a marketing ploy rather than a reflection of genuine, impactful, verifiable nature positive environmental practices. As well as close regulator, competitor and activist scrutiny of any 'nature positive' claim as greenwashing under Australia's strict misleading or deceptive conduct laws, 'nature positive' claims could lead to public scepticism and damage the company's social licence and reputation, especially amongst increasingly environmentally conscious consumers who are vigilant against insincere corporate sustainability claims.

'Nature positive' is emerging globally

'Nature Positive' is rapidly entering the lexicon as a new 'green' term. In December 2022, the Kunming-Montreal Global Biodiversity Framework (GBF) was adopted by 196 countries, including Australia, at the UN Biodiversity Conference (COP15) in Montreal, Canada. The GBF outlines ambitious targets aimed at halting and reversing biodiversity loss by 2030 and a vision of living in harmony with nature by 2050. 'Nature positive' is often used to refer to the GBF's principal goals of limiting and reversing biodiversity loss and of increasing nature by 2030 on a 2020 baseline and achieving full recovery by 2050. The latest conference – COP16 – has just taken place in Colombia, with the aim of transforming those international 'nature positive' commitments into actions globally and nationally. This included adopting a mechanism to track progress towards the targets of the GBF and seeking to increase the current trickle of financial resources so that all countries have the opportunity to meet these targets.

In the meantime, more and more companies are reporting on their nature impacts and dependencies. At COP 16 the Taskforce on Nature-related Financial Disclosures (TNFD) announced that more than 500 large corporates globally have now committed to adopting TNFD-aligned nature-related risk management and corporate reporting. That includes Australian companies such as Brambles, Forico, GPT, New Forest, Telstra, and Landcom who were among the first cohort of Australian reporting adopters, as well as Qantas, Blackmores and NEXTDC. Those commitments require reporting on nature impact and dependency over and above what those companies will be required to do under new mandatory climate-related reporting rules.

Just before COP 16, in mid-October 2024, Sydney hosted the world first Global Nature Positive Summit, with a MinterEllison delegation in attendance. A recurring theme emerged in various sessions and through our conversations with international participants – the fear that the powerful 'nature positive' term would be appropriated by corporates to become a new marketing buzzword, both creating risk for those corporates but more importantly from the perspective of participants, diluting global and national nature repair efforts.

The absence of standardised methods and metrics for measuring nature and biodiversity presents a significant challenge. The short point is that repairing nature is harder to measure than carbon emissions, which are hard enough, but which at least has clear units of measurement (tons of CO2e). Climate efforts after 2015 coalesced around 'net zero' and there are now reasonably well understood and largely accepted standardised ways of measuring that. The same cannot yet be said for 'nature positive'. There are efforts underway – for example, the Nature Positive Initiative (NPI) has been established to drive alignment around the definition, integrity and use of the term ‘nature positive,’ along with the science-based measurement of contributions to nature-positive outcomes.

The NPI recently published for consultation a proposed small set of 'state of nature' metrics that can be used to assess if actions are delivering nature-positive outcomes and contributing to halting and reversing nature loss. This may assist with making more attributive statements on nature positive outcomes in various circumstances. In addition, the World Business Council for Sustainable Development (WBCSD) announced plans at COP16 to give guidance and to harmonise nature impact and dependency metrics used by corporations to help them track progress toward a nature-positive goal. But the NPI metrics and the WBCSD guidelines are not expected to be released until later in 2025.

Despite those and other international initiatives, there is a long way to go before the content of "nature positive" becomes clear and well understood.

What might "Nature Positive" mean in Australia?

In 2022, the Federal Government unveiled significant reforms to Australia's national environmental legislation. The reforms were outlined under the Nature Positive Plan: Better for the environment, better for business (Nature Positive Plan) which aimed to establish a legislative and policy framework for a 'Nature Positive Australia'. In April 2024, the Honourable Tanya Plibersek MP, Minister for the Environment and Water unveiled the second stage of the reforms, which includes the introduction of a legislatively enshrined definition of 'Nature Positive' in one of three reform Bills – the Nature Positive (Environment Information Australia) Bill 2024 (EIA Bill). The EIA Bill passed the House of Representatives in July 2024 and was presented to the Senate in August 2024.

Clause 6 of the EIA Bill defines 'Nature Positive' as:

an improvement in the diversity, abundance, resilience, and integrity of ecosystems from a baseline.

Words like 'diversity', 'abundance', 'resilience' and 'integrity' are powerfully resonant and positive words, but they are also words which are open-textured and capable of taking a range of meanings. The proposed definition under the EIA Bill has faced criticism from some quarters because it lacks clear and objective targets or benchmarks by which to measure progress towards Nature Positivity. For instance, the Law Council of Australia described the definition under the EIA Bill as 'watered down' and 'out of step' with 'the widely accepted definition of Nature Positive' which is, as set out above, to 'halt and reverse nature loss by 2030 on a 2020 baseline and achieve full recovery by 2050'.

The EIA Bill if passed would also establish a new statutory position, the Head of Environment information Australia (HEIA), who will be tasked with setting the baseline (by 31 December 2025) to gauge Australia's efforts towards Nature Positive, as well as monitoring and publicly reporting on the country's progress to achieving Nature Positivity. Indeed, concerns have also been raised about the HEIA having the exclusive authority and discretion to determine the benchmarks for evaluating Nature Positivity.

In September 2024, a Senate Committee recommended that the Australian Government undertake further consultation regarding the definition of 'Nature Positive' to ensure consistency with Australia's international commitments, including the GBF. As such, amendments to the definition of Nature Positive under the EIA Bill may be introduced by the Senate, that remains to be seen.

Legal and regulatory risks

It is clear that under the currently proposed Australian definition in the EIA Bill, the concept of 'Nature Positive' is centred on the collective well-being of ecosystems, rather individual species. The aim is to ensure that there is a marked improvement across the diversity, abundance, resilience and integrity within ecosystems. The EIA Bill notes that improvements in these four factors may contribute to, but are not solely indicative of, achieving a Nature Positive status. Indeed, in some cases, the diversity, abundance, resilience and integrity of an ecosystem may be improved by reducing the abundance of a particular species.

What is also clear is that the term 'Nature Positive' is defined in the proposed EIA Bill for the purpose of country-level assessment. It is not defined for the purpose of company-level assessment. It is possible to imagine that a corporate actor could, through its actions (or inactions) contribute to outcomes which are verifiably 'nature positive' (as defined) by way of improvement to an ecosystem's diversity, abundance, resilience and/or integrity. But it seems difficult to imagine that a company could accurately describe itself simply as 'nature positive' (as defined) in a confidently verifiable way. Such an outcome would presumably require improvements in data availability and transparency, regulation and a level of coordination to create a level playing field and prevent impact leakage.

The legal and reputational risk environment for sustainability-related claims

Corporate claims to be 'nature positive' are particularly risky in Australia, in the context of prohibitions outlined in Commonwealth legislation, regulatory scrutiny, activist actions (including shareholder activism), and market competitor action. We outline these further below.

Legal framework

Various prohibitions contained in the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission Act 2001 (Cth) and the Australian Consumer Law against misleading and deceptive statements or conduct.

Regulatory consideration

Increasing regulatory scrutiny in Australia of sustainability-related claims, exemplified in:

• ASIC's recent enforcement of civil penalty provisions in ASIC v Vanguard Investments Australia. The enforcement related to misleading claims made by Vanguard about certain ESG exclusionary screens applied to its 'Ethically Conscious Global Aggregate Bond Index Fund'. The Court found that nearly 75% of the fund's constituent securities had not been adequately researched or screened against the applicable ESG criteria and ordered the significant penalty of $12.9 million.
• ACCCs long-awaited environmental claims guidance, and subsequent commencement of proceedings against a manufacturer of kitchen and garbage bags in April 2024 for representations said to be misleading and deceptive, that its bags comprised 50% recycled ocean plastic.

Nature activism

Nature activists looking for ways to hold companies to account for 'greenwashing', including by seeking access to information and documents to validate their claims (as in Abrahams v Commonwealth Bank of Australia) and commencing class actions (as in Sharma v Minister for the Environment, where eight young plaintiffs filed a class action against the Commonwealth Minister for Environment, alleging the Minister owed a duty of care to Australian children to take reasonable care to avoid personal injury arising from the impacts of climate change when considering whether to grant approval to the extension of a thermal coal mine), long a tool deployed by activists for advancing climate change agendas because the impacts of climate-related conduct often affect large groups of people.

Competitor action

Competitor actions are possible, objecting to any unfair business advantage derived from 'nature positive' claims, much like Telstra suing Optus over an advertising campaign in 2020, which Telstra said was designed to cause consumers to choose Optus over Telstra. Telstra argued that the campaign created an unfair and unlawful advantage for Optus in its competition with Telstra. Although Telstra was unsuccessful in convincing the Court that Optus' campaign was misleading or deceptive in the way alleged, it is easy to imagine a similar claim being brought on the basis of misleading 'nature positive' claims.

Conclusion

Tempted to call your company 'nature positive' in advertising? Don't be! At least not without exercising real care and precision in also describing exactly what you mean by that and ensuring that you can confidently verify your claim.

At MinterEllison, we understand the importance of an integrated approach that balances ambitious ESG strategy development with legal and regulatory compliance. Reach out at any time to discuss your business' approach to ESG.