over dry, cracked mud at the edge of a farm April 16, 2009 near Buttonwillow, California. Central Valley farmers and farm workers are suffering through the third year of the worsening California drought with extreme water shortages and job losses. The office of California Gov. Arnold Schwarzenegger predicts Central Valley farm losses of $325 million to $477 million and total losses for crop production and related business to be between $440 and $644 million.
prior to this research, there hasn’t been a detailed understanding of how material the risks are that the economy and financial system faces from nature degradation. This is leaving the economy and financial sector exposed, while these risks continue to rise unchecked.
Agriculture is reliant on soil and water quality, pollinators, and biodiversity. Meanwhile we depend on electricity generators for light and power in our homes, yet power stations are dependent on surface waters for cooling; any constraint in water supplies could impede production and raise energy prices.
The most prominent of these is the Taskforce for Nature-related Financial Disclosures, which provides a framework for businesses to report specifically on their nature-related risks and opportunities. Such frameworks though are only the beginning - industry and investors must understand the implications of that reporting. Avery says: “Disclosures are a really critical first step for business to understand its reliance on nature, and material risk as a result of its degradation.