Quantifying firm-level risks from nature deterioration
Fuente:
arXiv
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| Format: | Preprint |
| Published: |
2025
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| _version_ | 1866912312602918912 |
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| author | Crisostomo, Ricardo |
| author_facet | Crisostomo, Ricardo |
| contents | We estimate the loss of value that companies might suffer from nature overexploitation. We find that global equities shed 26.8% in a scenario of unabated nature decline, while the worst-performing firms lose ~75% of their value. Our risk framework considers five environmental hazards: biodiversity loss, land degradation, climate change, human population and nature capital. We also introduce two metrics to assess nature-related risks: a Country Degradation Index that tracks the damage caused by environmental hazards in specific territories, including nonlinear dynamics and tipping points; and a Nature Risk Score that summarizes the risk that companies face due to the decline of nature and its services. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2501_14391 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Quantifying firm-level risks from nature deterioration Crisostomo, Ricardo Risk Management Pricing of Securities We estimate the loss of value that companies might suffer from nature overexploitation. We find that global equities shed 26.8% in a scenario of unabated nature decline, while the worst-performing firms lose ~75% of their value. Our risk framework considers five environmental hazards: biodiversity loss, land degradation, climate change, human population and nature capital. We also introduce two metrics to assess nature-related risks: a Country Degradation Index that tracks the damage caused by environmental hazards in specific territories, including nonlinear dynamics and tipping points; and a Nature Risk Score that summarizes the risk that companies face due to the decline of nature and its services. |
| title | Quantifying firm-level risks from nature deterioration |
| topic | Risk Management Pricing of Securities |
| url | https://arxiv.org/abs/2501.14391 |