Develop and apply natural capital risk assessment and opportunity at the farm level
Author Alice Mabin. Keringa Angus Bulls crossing a salt lake at Tintinara, South Australia.
Summary: Agriculture is a crucial sector that provides essential resources to the world's population. However, its heavy reliance on natural resources such as land, air, water, and biodiversity makes it susceptible to risks related to the collapse of these natural capital components. This vulnerability also affects financial institutions that lend to the agricultural sector as they are indirectly exposed to these risks. Therefore, financial institutions are increasingly considering incorporating natural capital risk assessment into their decision-making processes. However, implementing this approach faces challenges such as high costs and the lack of a standardized method for assessing natural capital-related risks in agriculture. My PhD project aims to develop a practical framework to assess natural capital risks for the agricultural sector, incorporating farmers' knowledge and experience. It will help farmers identify and manage nature-related risks and improve their environmental performance. It also enables financial institutions to evaluate the natural capital risks associated with their lending to the agricultural sector and promote customers to effectively manage nature-related risks. Overall, this framework has the potential to promote sustainable practices in agriculture, enhance the resilience of the sector and financial institutions to natural capital-related risks, and contribute to the long-term viability of the agricultural industry.