Nature emerges as mainstream issue for boards

Drawing on a national survey of non-executive directors and chairs, and interviews with senior directors across listed, private, not-for-profit and government organisations, the study Nature Enters the Boardroom sets out how directors are beginning to factor nature into key areas of risk oversight, governance and strategy.

While the research finds directors are still at an early stage, they are increasingly aware of the financial and operational implications of nature loss – from supply chain disruption to rising costs and asset exposure.

The most advanced boards are tackling climate and nature together, recognising their interdependencies.

Policy uncertainty remains a major challenge for boards and their organisations in evaluating and responding to nature-related risks.

AICD Managing Director & CEO Mark Rigotti said more directors were recognising nature as a material business issue.

“Nature underpins Australia’s economy and this research establishes a baseline of boardroom practice at a time when clearer national environmental settings would support more confident decision-making and investment.

“Directors have identified policy uncertainty as a major barrier to effective governance and national productivity. Current settings are not adequately delivering for business or the environment.”

University of Sydney Business School research co-lead Darya Boukata said demands on boards were shifting as nature-related risks become more visible. “Nature is the bedrock of our economy – the essential infrastructure that quietly sustains supply chains and underpins asset values. When nature degrades, those impacts cascade up the supply chain and create financially material risks for business.  

“Directors in this study are starting to recognise these dependencies and the need for stronger governance in response.”

Key survey findings include:

• 81% agree nature-related risks are important for their organisation
• Four in five directors say expectations from multiple stakeholders influence their approach to nature-related issues
• 51% cite unclear policy settings as a barrier, especially the lack of environmental standards (76%) and slow environmental approvals (35%) 
• 52% have updated risk frameworks to include nature-related risk • 24% of listed respondents have integrated nature into their climate strategy; 53% say they plan to 
• One-third of organisations make no nature-related disclosures; 41% report full-board oversight; 22% draw on committees most commonly Audit and Risk.

 Access the full study here

Media contacts: Jane Braslin 0439 167 567 jbraslin@aicd.com.au