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Implementing natural capital credit risk assessment in agricultural lending

Citation

Ascui, F and Cojoianu, TF, Implementing natural capital credit risk assessment in agricultural lending, Business Strategy and the Environment, 28, (6) pp. 1234-1249. ISSN 0964-4733 (2019) [Refereed Article]

Copyright Statement

2019 John Wiley & Sons, Ltd and ERP Environment

DOI: doi:10.1002/bse.2313

Abstract

Agriculture has critical impacts and dependencies on natural capital, and agricultural lenders are therefore exposed to natural capital credit risk through their loans to farmers. Currently, however, lenders lack any detailed guidance for assessing natural capital credit risk in agriculture and are challenged by the fact that the relevant material risks vary considerably by agricultural sector and geography. This paper develops a natural capital credit risk assessment framework based on a bottom‐up review of the material risks associated with natural capital impacts and dependencies for Australian beef production. It demonstrates that implementing natural capital credit risk assessment is feasible in agricultural lending, using a combination of quantitative and qualitative inputs. Implementation challenges include the complexity and interconnectedness of natural capital processes, data availability and cost, spatial data analytical capacity, and the need for transformational change, both within lending organisations and across the banking sector.

Item Details

Item Type:Refereed Article
Keywords:agricultural lending, Australia, beef production, credit risk assessment, environmental credit risk, natural capital
Research Division:Commerce, Management, Tourism and Services
Research Group:Accounting, Auditing and Accountability
Research Field:Sustainability Accounting and Reporting
Objective Division:Environment
Objective Group:Environmental and Natural Resource Evaluation
Objective Field:Sustainability Indicators
UTAS Author:Ascui, F (Dr Francisco Ascui)
ID Code:136684
Year Published:2019
Deposited By:TSBE
Deposited On:2020-01-14
Last Modified:2020-03-30
Downloads:0

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