Developing an evidence base for assessing natural capital risks and dependencies in lending to Australian wheat farms

Farmers are highly dependent on stocks of natural capital, and lenders are in turn exposed to natural capital through their loans to farmers. However, the traditional process for assessing a farmer’s credit risk relies primarily on historical financial data. Banks’ consideration of environmental factors tends to be limited to major risks such as contaminated land liabilities, and to large project and corporate finance, as opposed to the smaller loans typical of the Australian agricultural sector. The relevant risks and dependencies for agriculture vary by sub-sector and geography, and there is a lack of standardised methodologies and evidence to support risk assessment. We provide an evidence base to support natural capital risk assessment for a single sub-sector of Australian agriculture–wheat farming. We show that such an assessment is possible, with a combination of quantitative and qualitative inputs, but the complexity and interconnectedness of natural capital processes is a challenge, particularly for soil health. © 2017, © 2017 Informa UK Limited, trading as Taylor & Francis Group

Salmon, sensors, and translation : the agency of Big Data in environmental governance

This paper explores the emerging role of Big Data in environmental governance. We focus on the case of salmon aquaculture management from 2011 to 2017 in Macquarie Harbour, Australia, and compare this with the foundational case that inspired the development of the concept of ‘translation’ in actor-network theory, that of scallop domestication in St Brieuc Bay, France, in the 1970s. A key difference is the salience of environmental data in the contemporary case. Recent dramatic events in the environmental governance of Macquarie Harbour have been driven by increasing spatial and temporal resolution of environmental monitoring, including real-time data collection from sensors mounted on the fish themselves. The resulting environmental data now takes centre stage in increasingly heated debates over how the harbour should be managed: overturning long-held assumptions about environmental interactions, inducing changes in regulatory practices and institutions, fracturing historical alliances and shaping the on-going legitimacy of the industry. Environmental Big Data is now a key actor within the networks that constitute and enact environmental governance. Given its new and unpredictable agency, control over access to data is likely to become critical in future power struggles over environmental resources and their governance. © The Author(s) 2018

Sensing reality? New monitoring technologies for global sustainability standards

In the 1990s, civil society organizations partnered with business to “green” global supply chains by setting up formal sustainability standard-setting organizations (SSOs) in secwtors including organic food, fair trade, forestry, and fisheries. Although SSOs have withstood the long-standing allegations that they are unnecessary, costly, nondemocratic, and trade-distorting, they must now respond to a new challenge, arising from recent developments in technology. Conceived in the pre-Internet era, SSOs are discovering that verification systems that utilize annual, expert-led, low-tech field audits are under pressure from new information and communication technologies that collect, aggregate, interpret, and display open-source “Big Data” in almost real time. Drawing on the concept of governmentality and on interviews with experts in sustainability certification and natural capital accounting, we argue that while these technological developments offer many positive opportunities, they also enable competing alternatives to the prevailing “truth” or governing rationality about what is happening “on the ground,” which is of critical existential importance to SSOs as guarantors of trust in claims about sustainable production. While SSOs are not helpless in the face of this challenge, we conclude that they will need to do more than take incremental action: rather, they should respond actively to the disintermediation challenge from new virtual monitoring technologies if they are to remain relevant in the coming decade. © 2017 by the Massachusetts Institute of Technology

Sensing reality? New monitoring technologies for global sustainability standards

In the 1990s, civil society organizations partnered with business to “green” global supply chains by setting up formal sustainability standard-setting organizations (SSOs) in sectors including organic food, fair trade, forestry, and fisheries. Although SSOs have withstood the long-standing allegations that they are unnecessary, costly, nondemocratic, and trade-distorting, they must now respond to a new challenge, arising from recent developments in technology. Conceived in the pre-Internet era, SSOs are discovering that verification systems that utilize annual, expert-led, low-tech field audits are under pressure from new information and communication technologies that collect, aggregate, interpret, and display open-source “Big Data” in almost real time. Drawing on the concept of governmentality and on interviews with experts in sustainability certification and natural capital accounting, we argue that while these technological developments offer many positive opportunities, they also enable competing alternatives to the prevailing “truth” or governing rationality about what is happening “on the ground,” which is of critical existential importance to SSOs as guarantors of trust in claims about sustainable production. While SSOs are not helpless in the face of this challenge, we conclude that they will need to do more than take incremental action: rather, they should respond actively to the disintermediation challenge from new virtual monitoring technologies if they are to remain relevant in the coming decade

Creative accounting : a critical perspective on the market-based method for reporting purchased electricity (scope 2) emissions

Electricity generation accounts for approximately 25% of global greenhouse gas (GHG) emissions, with more than two-thirds of this electricity consumed by commercial or industrial users. To reduce electricity consumption-related emissions effectively at the level of individual firms, it is essential that they are measured accurately and that decision-relevant information is provided to managers, consumers, regulators and investors. However, an emergent GHG accounting method for corporate electricity consumption (the ‘market-based’ method) fails to meet these criteria and therefore is likely to lead to a misallocation of climate change mitigation efforts. We identify two interrelated problems with the market-based method: 1. purchasing contractual emission factors is very unlikely to increase the amount of renewable electricity generation; and 2. the method fails to provide accurate or relevant information in GHG reports. We also identify reasons why the method has nonetheless been accepted by many stakeholders, and provide recommendations for the revision of international standards for GHG accounting. The case is important given the magnitude of emissions attributable to commercial/industrial electricity consumption, and it also provides broader lessons for other forms of GHG accounting. © 2017 The Author

From impacts to dependencies : a first global assessment of corporate biodiversity risk exposure and responses

There is growing awareness that biodiversity loss poses a significant risk to the global economy, but a lack of clarity on what this means for corporations, and how they are responding. This study provides a first quantitative assessment of biodiversity risk exposure across the world's largest listed companies, compared with their adoption of biodiversity policies, through analysis of disclosures from a sample of 11,812 companies from 2004 to 2018. We find that companies have started responding strategically to biodiversity risk, with 29% having adopted a biodiversity policy by 2018. However, around $7.2 trillion of total enterprise value remains exposed to unmanaged biodiversity risk. Companies in sectors with material impacts on biodiversity tend to have high levels of response, but there is poorer responsiveness to material biodiversity dependency risks. A natural-capital-based view (NCBV) of the firm is proposed to theorise how corporations are constrained by both their impacts and dependencies on natural capital. © 2022 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd

Comparing sustainability claims with assurance in organic agriculture standards

© 2019, © 2019 Environment Institute of Australia and New Zealand Inc. Voluntary organic standard-setting organisations (SSOs) depend upon public trust in the truth claims implied by their labels: that the product in question has been produced using organic methods. They create and maintain this trust through assurance frameworks based on third-party verification of compliance with organic standards. It is therefore potentially problematic if an SSO makes additional claims that are not capable of being supported by their assurance frameworks. We investigate the claims made about the sustainability of organic agriculture by three voluntary organic SSOs, compared with assurance provisions within their standards. The analysis covers Australia, which has 53 per cent of the world\u27s certified organic farmland; and is extended internationally by including the IFOAM standard, with which a further 49 organic standards are affiliated worldwide. We find that while these standards generally contain principles and requirements that support sustainability claims, they lack well-specified means of verification in most cases other than the ‘core’ claims to exclude synthetic chemical inputs and genetically modified organisms. This assurance gap creates the risk of a consumer backlash. We discuss two ways to mitigate this risk: by strengthening verification within standards; and/or by employing new agricultural information and communication technologies to support claims outside the certification process