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Cambridge Institute for Sustainability Leadership (CISL)

11 March 2026 - Environmental and social risks are compounding across economies and portfolios, yet most risk frameworks assess them in isolation. This report provides a practical, systems-based approach to help investors understand how these interconnected risks amplify financial exposure – particularly in high-impact sectors like agrifood – and outlines actionable levers to build resilience, reduce volatility and support long-term development. 

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About

Environmental and social risks are increasingly interconnected, creating compounding and financially material impacts across value chains, geographies and portfolios. Yet most risk frameworks assess these factors in isolation, underestimating how combined shocks can amplify volatility, undermine diversification and affect long-term returns. 

These risks are particularly visible in global agrifood systems, which generate nearly 30% of global emissions but attract only 7% of climate investment. When climate shocks hit socially vulnerable regions, disruptions cascade through supply chains – driving credit defaults, asset impairments and food price volatility. What begins as a local environmental event can quickly become a systemic financial risk. 

This report introduces a practical, systems-based framework to help investors assess how climate and social risks compound across geographic scale, value chains and socio-demographic vulnerabilities. Building on the Taskforce on Inequality and Social-related Financial Disclosures (TISFD), it translates emerging thinking into actionable guidance for investment decision-making. 

 

For investors, this translates into key challenges:  

  • Intersecting climate and social risks can lead to underestimated downside risks, as probability, severity and persistence of losses can vary depending on underlying social vulnerabilities. 

  • Traditional risk models overlook feedback loops that can increase correlation of losses across asset and geographies. 

  • Environmental and social linkages operate across time horizons, eroding long-term portfolio stability and returns. 

However, the research also highlights opportunity: investments in adaptation and resilience, regenerative agriculture and resilient value chains can reduce volatility while strengthening long-term returns. 

To mobilise capital effectively, the research outlines three priority levers for investors: 

  • Value chain finance – supporting corporates to strengthen supply chain resilience.  

  • Stewardship and active engagement – influencing corporate behaviour and public policy to address systemic risks. 

  • Blended finance and catalytic capital – using public and philanthropic capital to de-risk transformative private investment. 

The message is clear: siloed risk frameworks are no longer fit for purpose. Integrating environmental and social risk is essential not only for sustainable development, but for safeguarding long-term resilience. 

Citing this report

University of Cambridge Institute for Sustainability Leadership (CISL). (2026). Breaking down silos: Navigating the intersection of environmental and social risks for investors. Cambridge Institute for Sustainability Leadership. 

Published: March 2026

Authors and acknowledgements   

Lead author:Trisha Mani

Supported by: Felicity Alvey 

Acknowledgements: 

We are grateful to the following, whose insights on finance, climate and social risks greatly supported the work:  

CISL Contributors: Dr Nina Seega, with input from Eliot Whittington, Gwyn Rhodes and Sibusiso Nkomo. We also acknowledge the early contribution of Elizabeth Clark, while at CISL. 

ILG Social Steering Group: Craig Campbell (Aon), Jeremy Ng (Bridgewater Associates), Sudip Hazra (First Sentier MUFG Sustainable Investment Institute), Iraz Soyalp (Manulife Investment Management), Benjamin Briceno (MUFG), Erwin Houbrechts (PGB Pensioendiensten), Sophie Lawrence and Kate Elliot (Rathbones), Paul Ruijs (Robeco), Victoria Leggett and Seraina Stiner (UBP). 

Expert Advisory Group: Chaitra Nayak (AIGCC), Paul Gilding (CISL Fellow), Beth Knight (CISL Senior Associate), Kayenat Kabir (FinDev Canada), Drew Johnson, Vibhuti Mendiratta (IFAD), Camilla Roman (ILO), Mohammed Saffar (LSE CETEx), Alexander Weston and Judith Tyson (LSE Grantham Institute), Jens Sedemund (OECD), Delilah Rothenberg (Predistribution Initiative), Andrea Saldarriaga and Vincent Siegerink (TISFD). 

Copyright

Copyright © 2026 University of Cambridge Institute for Sustainability Leadership (CISL). Some rights reserved. Except where otherwise indicated, the material featured in this publication is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International Licence (CC BY-NC-SA 4.0). 

Disclaimer

The views expressed here are those of the authors and do not represent an official position of CISL, the University of Cambridge, or any of its individual business partners or clients.