Finance and the Earth system – exploring the links between financial actors and non-linear changes in the climate system
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Financial actors and capital play a key role in extractive economic activities around the world, as well as in current efforts to avoid dangerous climate change. Here, in contrast to standard approaches in finance, sustainability and climate change, we elaborate in what ways financial actors affect key biomes around the world, and through this known “tipping elements” in the Earth system. We combine Earth system and sustainability sciences with corporate finance to develop a methodology that allows us to link financial actors to economic activities modifying biomes of key importance for stabilizing Earth’s climate system. Our analysis of key owners of companies operating in the Amazon rainforest (Brazil) and boreal forests (Russia and Canada) identifies a small set of international financial actors with considerable, but as of yet unrealized, globally spanning influence. We denote these “Financial Giants”, and elaborate how incentives and disincentives currently influence their potential to bolster or undermine the stability of the Earth’s climate system.
Galaz , V , Crona , B , Dauriach , A , Scholtens , B & Steffen , W 2018 , ' Finance and the Earth system – exploring the links between financial actors and non-linear changes in the climate system ' , Global Environmental Change , vol. 53 , pp. 296-302 . https://doi.org/10.1016/j.gloenvcha.2018.09.008
Global Environmental Change
Copyright © 2018, Elsevier Ltd. This work is made available online in accordance with the publisher’s policies. This is the author created, accepted version manuscript following peer review and may differ slightly from the final published version. The final published version is available at https://doi.org/10.1016/j.gloenvcha.2018.09.008
DescriptionThe authors acknowledge the support from the Erling-Persson Family Foundation through the Global Economic Dynamics and the Biosphere programme (GEDB) at the Royal Swedish Academy of Sciences, the Futura Foundation, Vinnova (Earth System Finance), Mistra Financial Systems (MFS), and the Foundation for Strategic Environmental Research (Mistra) through the Stockholm Resilience Centre (Stockholm University).
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