Challenges and opportunities when assessing exposure of financial investments to ecosystem regime shifts
Summary
Financial investments will be affected by ecological regime shifts through the loss of natural resources underpinning dependencies of most economic sectors. We suggest one possible pathway to link industry and products to the likelihood of ecological regime shifts. The challenges and opportunities are discussed at each step, including datasets, methods and metrics. To this end, we identify recent large-scale, state-of-the-art literature that can link land-based company activities to regime shifts. The estimation of investment exposure to regime shifts is possible, but higher resolution in company trade data as well as spatially-explicit datasets of commodity production are needed to improve estimations. This will require coordinated effort from the scientific community, businesses, and the policy sector.
