Trading on Trust: Australia’s Sustainable Path in Beef and Wheat Export Markets

The OECD report examines how Australia’s beef and wheat sectors are responding to global sustainability demands through a mix of industry-led frameworks, government support, and market-driven initiatives. It highlights beef's leadership in environmental action and wheat’s emerging momentum amid rising trade and finance pressures.

As global demand for environmentally sustainable agricultural goods intensifies, Australia’s response, particularly in its export-heavy beef and wheat sectors, is drawing attention. A new report from the OECD, Environmental Sustainability Initiatives Related to Highly Traded Agricultural Commodities: Case Study of the Australian Beef and Wheat Sectors, sheds light on this shift. Authored by Annelies Deuss and Olivia du Bois from the OECD and consultant Alison Watson, and enriched by input from institutions such as Meat and Livestock Australia (MLA), the Grains Research and Development Corporation (GRDC), the University of Queensland, Charles Sturt University, and the Food Agility Cooperative Research Centre, the report examines how Australia’s agricultural sectors are adapting to meet rising global expectations around sustainability.

Sustainability at the Intersection of Trade and Environment

Australia exports nearly 80% of its wheat and half of its beef, making these sectors particularly sensitive to changes in international regulations, market preferences, and investor scrutiny. The report identifies 17 prominent environmental sustainability initiatives, the majority of which relate to the beef industry, reflecting its heavier environmental footprint. What distinguishes Australia’s approach is its strong reliance on industry-led frameworks. Private sector initiatives dominate, supported by a government philosophy that favors enabling voluntary action through incentives, research, and information-sharing rather than imposing regulations.

The initiatives reviewed range from certification programs and voluntary emissions reduction targets to data-tracking tools and public-private investment strategies. While many are relatively new and still in pilot phases, they reflect a coordinated response to mounting pressure from both export markets and financial institutions. The report does not evaluate their effectiveness but provides valuable insight into their scope and alignment with trade, environmental, and market goals.

Global Markets and ESG Demands are Driving Change

The most prominent driver of this transformation is the growing demand from financial institutions and multinational buyers for verified environmental performance. Major customers of Australian agriculture, including JBS, Nestlé, PepsiCo, and Mars, have committed to ambitious net-zero, deforestation-free, or regenerative agriculture goals. These commitments, often made under frameworks such as the Science Based Targets initiative or the Taskforce on Climate-related Financial Disclosures, trickle down to suppliers, requiring Australian producers to provide reliable data on emissions, land use, and sustainability practices.

Domestically, this trend is reinforced by new legislation. The Treasury Laws Amendment Act, passed in September 2024, mandates climate-related disclosures from January 2025 for large companies, covering Scope 1, 2, and 3 emissions. This is expected to influence large agribusinesses and their supply chains. The financial sector’s tightening ESG standards have become a powerful lever for motivating producers, especially those seeking investment or access to premium markets.

Trade Access Hinges on Environmental Credentials

The second major driver identified is market access. Regulations in importing countries are raising the bar for environmental compliance. The European Union’s Deforestation Regulation, its Renewable Energy Directive, and its Carbon Border Adjustment Mechanism are just a few examples of new policies that could limit access for non-compliant agricultural goods. Similar rules are under consideration in the United Kingdom, the United States, and parts of Asia.

To respond, Australian exporters are investing in traceability, sustainability frameworks, and carbon measurement tools. The government has also prioritized climate-smart agriculture as a trade strategy, linking domestic sustainability to export competitiveness. The Australian Carbon Credit Unit (ACCU) scheme, though facing scrutiny over integrity, allows producers to earn and trade credits for verified emissions reductions. Meanwhile, the Methane Emissions Reduction in Livestock (MERiL) program, backed by AUD 29 million, supports research into feed technologies that lower methane from cattle, a key source of agricultural emissions.

Beef Sector Leads with Frameworks and Data Tools

The beef industry has taken the lead in sustainability innovation. The Australian Beef Sustainability Framework (ABSF), launched in 2017, is a comprehensive initiative that sets 53 indicators across environmental, economic, and animal welfare themes. It reports annually on key metrics, including biodiversity management, soil health, and greenhouse gas emissions. Two of its core targets to demonstrate a net-positive contribution to nature and achieve net-zero emissions align closely with its Carbon Neutral by 2030 (CN30) commitment.

The CN30 goal, while ambitious, has been instrumental in aligning research investment, industry focus, and public-private collaboration. Though recent assessments suggest the sector may fall short by about 10%, it has sparked large-scale investment in methane-reducing feed, carbon accounting, and landscape stewardship. Innovations like the Environmental Credentials for Grassfed Beef platform, developed by MLA and WWF-Australia with academic partners, help farmers collect and share environmental data using satellite monitoring and benchmarking tools. These tools are increasingly critical as supply chain transparency becomes a prerequisite for premium market access.

Wheat Sector Gaining Momentum, Slowly but Steadily

In comparison, the wheat sector is at an earlier stage of environmental innovation. The "Behind Australian Grain" framework, launched in 2020 by industry groups like GrainGrowers and GRDC, outlines sustainability priorities but lacks robust reporting or measurable indicators. Still, momentum is growing. GRDC’s new Sustainability Initiative, backed by AUD 55 million, focuses on climate adaptation, soil health, and reducing input emissions. Unlike in beef, where targets are more defined, the wheat sector’s approach is to support the research and practices that allow farmers to transition without imposing prescriptive requirements.

The Cool Soil Initiative and Carbon Neutral Grain Pilot are promising projects that test new ways to measure, reduce, and communicate emissions across the wheat value chain. These pilots involve diverse partners, including food giants like Kellogg’s and Mars, research institutions, and growers. The data from these programs could eventually support stronger certification systems and market claims.

Ultimately, the OECD report presents a nuanced picture of Australia’s agricultural sustainability efforts, marked by strong industry leadership, targeted government support, and a clear understanding that future trade depends on environmental credibility. While challenges remain, especially around data consistency, enforcement, and the development of internationally accepted standards, Australia’s experience offers lessons for other nations navigating the complex relationship between food production, environmental integrity, and global trade.