Valuing the Environment in Viticulture

This project aimed to understand the relationship between the financial and environmental performance of vineyards, and to test the hypothesis that environmental information can enhance financial decision-making.

Produce the right thing
Leverage brand Australia
Improve access to finance
Build a digitally capable workforce

Completed:
August 2020
Duration:
2 years
Technologies:
Data analytics, Natural capital accounting

In Partnership With:

National Australia Bank Limited
Queensland University of Technology (QUT)
Australian Wine Research Institute
National Australia Bank Limited
Queensland University of Technology (QUT)
Australian Wine Research Institute

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The Challenge

Sustainable farming practices are not just good for the environment, they contribute to the long-term financial sustainability of any agricultural business.

Farms with high natural capital and effective environmental stewardship are more likely to be resilient in the face of climatic and other stressors, which helps maintain or increase their long-term profitability and their value as an asset.

However, a lack of consistent and cost-effective metrics and methods remains a key barrier to farmers, businesses and institutions (e.g. banks, insurers and government) incorporating natural capital into financial and other decision-making.

The Outcomes

This project focused on the Australian viticulture industry and built on over ten years of industry sustainability data collected by the Australian Wine Research Institute (AWRI). The team analysed the data and worked with Australian wine-grape growers to identify links between environmentally sustainable practices and financial performance.

This project established metrics that enabled growers to benchmark their performance and supported their ongoing environmental and financial sustainability. The metrics developed could assist banks to calculate risk and reward sustainable producers with more favourable lending terms.

Key outcomes included:

  • The project linked environmental benchmarking data to financial information and developed a sustainability indicator (Resource Intensity Score) for the wine sector. This RIS sustainability indicator is a first for the Australian wine sector and may serve as a leading example for other sectors.
  • The research found that vineyards with the top 10 percent gross margin tended to be more resource-use efficient than those in the bottom 10 percent. They  used 47 percent less water, 59 percent less energy and emitted 63 percent less carbon for every tonne of grapes produced, based on median values.
Environmental benchmarking data was linked to financial information to develop a developed a sustainability indicator called a Resource Intensity Score (RIS) for the wine sector.

Publications

Project Summary Valuing the Environment in Viticulture

Further information

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