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Aggravation Risk: A tool to capture multiple pathways of corporate sustainability risk
Stockholm University, Faculty of Science, Stockholm Resilience Centre. The Royal Swedish Academy of Sciences, Sweden.ORCID iD: 0000-0002-8756-1649
Stockholm University, Faculty of Science, Stockholm Resilience Centre. The Royal Swedish Academy of Sciences, Sweden.ORCID iD: 0000-0003-1617-4067
(English)Manuscript (preprint) (Other academic)
Abstract [en]

There is increasing awareness that companies are not only impacting the environment but also dependent upon it for resources and services, on so-called natural capital. The awareness of this dependency has spurred the development of the concept of nature-related financial risk, as a part of corporate sustainability risk assessment. Nature-related (financial) risk is risk to financiers and corporations through impacts on the natural capital upon which their operations depend. The early developments in this field are promising, however we argue that there are two knowledge gaps which current conceptualisations and assessment tools still miss. The first gap is the lack of acknowledgement that it is company practises themselves, through their impact on the environment, that create risks. Risk is therefore not only something that is created by the environment or other actors, it can also be self-created. The second gap is acknowledging and capturing the long-term risk to natural resources and the ability of ecosystems to continue to create natural capital. This longer-term and wider ecosystem perspective on risk is currently not captured by the focus on short-term financial risk in the existing tools. Together these two gaps highlight that risk is  created and affect companies from multiple different pathways. We contribute in this paper to the nascent field of nature-related risk by addressing these two knowledge gaps and developing a tool to capture multiple different pathways of corporate sustainability risk. We use three primary sector industries (fisheries, aquaculture, and agriculture) to operationalise the tool.  

Keywords [en]
Sustainability risk, corporate and financial risk, conceptual model, double materiality, nature-related financial risks
National Category
Environmental Sciences Social Sciences Interdisciplinary
Research subject
Sustainability Science
Identifiers
URN: urn:nbn:se:su:diva-228759OAI: oai:DiVA.org:su-228759DiVA, id: diva2:1854402
Available from: 2024-04-25 Created: 2024-04-25 Last updated: 2024-04-25
In thesis
1. Sustainability Risk: A social-ecological systems perspective
Open this publication in new window or tab >>Sustainability Risk: A social-ecological systems perspective
2024 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Today’s world is characterised by new levels of complexity; however our societies remain deeply embedded in and dependent on a functioning biosphere. A biosphere that is increasingly being degraded by human activities. In this complex and intertwined world, acute shocks as well as chronic pressures of unsustainable activities have therefore become a prevalent feature. Together these shocks and chronic pressures create a complex risk landscape that we need to navigate with inter- and transdisciplinary solutions. However, the study of risk and the risk assessment tools in use, are siloed into scholarly disciplines and mismatched with the complexity at hand. In this thesis I tackle this mismatch, by using a social-ecological systems perspective and a variety of methodological approaches. Together the four papers of the thesis develop the interdisciplinary concept of sustainability risk and start to operationalise it through the application to national food systems and corporate sustainability risk assessment. Paper I introduces the concept of sustainability risk that I use and develop through-out the thesis. The paper also summarises some of the key definitions of risk within different disciplines and proposes five key dimensions that need to be adapted and developed in order for the existing risk assessment methods to fully capture risks in a complex world. Papers II-IV all represent applications of the concept of sustainability risk to different contexts. Paper II addresses national food supply risks and highlights how diverse risks to national self-sufficiency can come from low self-sufficiency (resulting in risk from trade disruptions) and low production diversity (resulting in risk from production shocks). Paper III addresses the data limitations we encounter when attempting to assess corporate sustainability risk and aims to overcome some of these limitations by developing fifteen novel reporting variables. These variables also contribute to the ongoing efforts to standardise corporate sustainability reporting. Paper IV builds on Paper III and develops an initial framework for assessing the risks to long-term natural resource production emanating from the impacts of corporate activities, thus broadening the conceptualisation of what risk is and how we assess it in the corporate sphere. 

Place, publisher, year, edition, pages
Stockholm: Stockholm Resilience Centre, Stockholm University, 2024. p. 51
Keywords
Sustainability risk, systemic risk, complex systems, social-ecological systems, corporate sustainability reporting, food security, resilience
National Category
Environmental Sciences Social Sciences Interdisciplinary
Research subject
Sustainability Science
Identifiers
urn:nbn:se:su:diva-228761 (URN)978-91-8014-815-3 (ISBN)978-91-8014-816-0 (ISBN)
Public defence
2024-06-14, hörsal 4, hus 2, Albano, Albanovägen 18 and online via Zoom, public link is available at the department website, Stockholm, 13:00 (English)
Opponent
Supervisors
Available from: 2024-05-22 Created: 2024-04-25 Last updated: 2024-05-13Bibliographically approved

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