Going beyond carbon: An "Earth System Impact" score to better capture corporate and investment impacts on the Earth system

32 Pages Posted: 10 Jul 2023

See all articles by Beatrice Crona

Beatrice Crona

Stockholm Resilience Centre; Global Economic Dynamics and the Biosphere Program

Giorgio Parlato

Global Economic Dynamics and the Biosphere

Steven J. Lade

Stockholm University - Stockholm Resilience Center

Ingo Fetzer

Stockholm University - Stockholm Resilience Center

Victor Maus

Vienna University of Economics and Business; International Institute for Applied Systems Analysis; Stockholm University - Stockholm Resilience Center

Date Written: June 29, 2023

Abstract

Corporations are responsible for a significant portion of observed impacts on the Earth system, including green-house gas (GHG) emissions, but also water extraction, landuse change and other pressures on nature. These nature-related impacts are essential to consider and capture because they have local impacts on a range of ecosystem functions on which companies and economies depend, but they also fundamental affect our ability to mitigate and adapt to a changing climate. Furthermore, climate, land and water interact and affect each other in various ways, such that climate change can be exacerbated by degraded ecosystems, which in turn are dependent on water.

This paper tests a novel metric developed to capture corporate Earth system impact (ESI) beyond merely direct GHG emissions, and explores how such a tool could be used to improve assessments of corporate environmental impacts and support decisions on where to direct public and private investments. We use the mining sector as a test case to illustrate the applicability of the ESI score and examine the impact of the ten largest (by market cap) mining companies in the non-precious and non-precious metal mining sector. We find that many of the mining assets have non-negligible impacts on land and water, and can show that the ESI metric identifies a different set of asset for targeted action than conventional carbon intensity scores would do.

Keywords: Earth system, planetary boundaries, corporate impact, sustainable investments, carbon intensity

Suggested Citation

Crona, Beatrice and Parlato, Giorgio and Lade, Steven J. and Fetzer, Ingo and Maus, Victor, Going beyond carbon: An "Earth System Impact" score to better capture corporate and investment impacts on the Earth system (June 29, 2023). Available at SSRN: https://ssrn.com/abstract=4495331 or http://dx.doi.org/10.2139/ssrn.4495331

Beatrice Crona (Contact Author)

Stockholm Resilience Centre ( email )

Kräftriket 2B
Stockholm, SE-114 19
Sweden

Global Economic Dynamics and the Biosphere Program ( email )

Sweden

Giorgio Parlato

Global Economic Dynamics and the Biosphere ( email )

Stockholm
Sweden

Steven J. Lade

Stockholm University - Stockholm Resilience Center ( email )

Ingo Fetzer

Stockholm University - Stockholm Resilience Center

Victor Maus

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria
06646571539 (Phone)
1020 (Fax)

International Institute for Applied Systems Analysis ( email )

Schlossplatz 1
Laxenburg, A-2361
Austria

Stockholm University - Stockholm Resilience Center

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