A new metric can help investors, companies, cities, and governments track their environmental impacts beyond greenhouse gas emissions, by assessing sub-global interactions between planetary boundaries.
The Environmental, Social and Governance metrics are a set of standards designed to assess the impact an investment might have on the environment. This metrics was critisised in an article in One Earth in May 2021, led by GEDB executive director Beatrice Crona.
A new study, recently published in Environmental Research Letters, by a research team form GEDB and Stockholm Resilience Centre draw similar conclusions:
“Developing a new metric for assessing the systemic impacts of businesses, investors and other actors on the Earth system is extremely important, since the current standards are not up to the task,” says lead author and former GEDB researcher Steve Lade, now at the Stockholm Resilience Centre.
Planetary interactions at smaller scales
In the new study, Lade and his colleagues, including Beatrice Crona, suggest a way to better understand the environmental impacts of corporate and public entities. The starting point of the study is the planetary boundary framework and its 'safe' global limits of human pressures on the Earth system—the planet’s climate and ecosystems. However, in order to enable companies, cities and other actors to assess the impacts of their decisions, it is important to understand how planetary boundaries interact at smaller scales.
One example is how deforestation in tropical Africa can trigger other impacts on climate, land and water elsewhere. Therefore, Lade and his colleagues started by tailoring their new metric around sub-global interactions between three processes: climate change, vegetation cover and surface water runoff. One of the most interesting results, according to the authors, was that the Earth system impact of deforesting the Amazon rainforest was amplified by a massive 2.5 times according to the new metric.
A first step and a word of caution
The resulting prototype metric can help stakeholders track their environmental impacts beyond greenhouse gas emissions. Moreover, it is a first step towards a way to account for key interactions among multiple Earth system processes, something that has so far been completely missing in all major corporate impact and risk assessment frameworks.
However, this first prototype does not cover all impact. For example, the fact that the new metric resulted in 0 for Australian tropical forests only communicates that incremental loss of these forests would not currently have global scale impacts on climate, land cover or water. The local effects on rare or threatened species would nevertheless be severe.