Media release: Clayton Utz environment expert calls on Southeast Asia to act on nature finance

Claire Smith, partner and leading environmental lawyer is calling on Southeast Asian nations and investors to urgently adopt new ways to finance nature. Claire who specialises in energy transition and natural capital, has pointed to Australia's pioneering Cassowary Credit Scheme as a practical model for valuing and financing natural capital across the region.

In a recent article, Nature is not a few good. Southeast Asia's investors must put a price on it, Smith argues that nature is not free, and its financial value must be recognised to protect vital ecosystems and reduce financial risks.

"Markets must integrate nature alongside carbon in capital deployment and risk assessment," Smith states. "The costs of nature loss are rapidly becoming significant financial liabilities."

More than half the world's GDP depends on functioning ecosystems, according to the World Economic Forum. Yet, Southeast Asia has been slow to use its natural wealth to fund protection and renewal, despite its rich biodiversity and high vulnerability to nature loss.

Australia's leadership in nature finance

Australia is moving forward with a federally legislated nature repair market scheme. Alongside it, the voluntary Cassowary Credit Scheme, which was developed with First Nations people and local land stewards, is among the world's first voluntary biodiversity credit programs to allow the verified 'stacking' of biodiversity credits with carbon credits. This means landowners can earn two types of tradable credits from the same land, creating additional income streams for both nature restoration and climate benefits.

"The Cassowary Credit Scheme provides a tangible example of how natural capital can be valued and financed across the Asia Pacific," Smith notes. "Its implications for Southeast Asia are significant."

Emerging nature and climate financial reporting

This call comes as new requirements for nature and climate financial reporting are emerging, driven by global sustainability disclosure standards such as IFRS S1 and S2, issued by the International Sustainability Standards Board. These are expected to increase demand for high-quality biodiversity and carbon credit projects.

Smith argues that Australia's experience demonstrates how government pilots and private partnerships can build a nature-positive economy, but stresses the need for robust governance, monitoring, and verification systems to prevent greenwashing and ensure genuine ecological restoration.

Call to action for Southeast Asia

"For governments and investors in Southeast Asia, now is the time for pilot projects, blended finance structures, and cross-border nature funds," Smith says.

She recommends public institutions use seed capital to reduce risks in biodiversity investments through public-private partnerships.

"Private banks and asset managers can develop products that combine nature and carbon outcomes, while central banks should explore integrating nature-related risks into the financial system."

Benefits beyond carbon

Smith also highlights the importance of "co-benefits" in nature credits, including biodiversity improvements, indigenous employment, ecotourism, and enhanced access to clean water. These co-benefits drive credibility and price premiums, fostering systemic ecosystem changes and delivering integrated outcomes crucial for Southeast Asia's land use, agriculture, and climate resilience.

"The Cassowary Credit Scheme proves nature can be measured and monetised," Smith says. "For Southeast Asia, the question is not whether to protect nature, but how to finance it. If we wait too long, the ecosystems that could create thriving environmental markets might disappear."