By Swati Pandey
SYDNEY, Oct 22 (Reuters) - Australia's Queensland state and HSBC HSBA.L said on Thursday they will make a "world-first investment" to protect the world-heritage listed Great Barrier Reef which is suffering from extensive coral bleaching events.
Rising sea temperatures and poor water quality are the two biggest threats to the Great Barrier Reef, which has lost more than half its coral in the past three decades.
In an attempt to safeguard the reef, HSBC and the Queensland government said they would buy "Reef Credits", a tradable unit that quantifies and values the work undertaken to improve water quality flowing onto the reef.
Similar to the carbon offset market which incentivises the reduction of carbon dioxide from the atmosphere, the scheme pays landholders for improved water quality.
The investment required to meet water quality targets for the Great Barrier Reef is estimated at A$4 billion ($2.8 billion), according to James Schultz, the CEO of GreenCollar, which developed the Reef Credit Scheme in partnership with landholders, the Queensland government and natural resource management organisations.
Neither HSBC nor the Queensland government disclosed how much they would invest to buy "reef credits".
GreenCollar estimates that the market could be worth over 6 million Reef Credits by 2030, opening the door for more businesses to invest in the future of the reef as part of their environmental, social and governance (ESG) strategies.
For buyers, "Reef Credits" would provide a measurable, audited water quality outcome tracked against internationally recognised targets and based on actual reduction in pollutants entering the reef.
"The first water quality market of its kind in the world, Reef Credits will play a pivotal role in protecting the future of the Great Barrier Reef as both an Australian and international icon," HSBC said in a statement.
The Great Barrier Reef was world heritage listed in 1981 by UNESCO as the most extensive and spectacular coral reef ecosystem on the planet. ($1 = 1.4132 Australian dollars)