Why Brazil's megadrought is a Wall Street failure

Brazil's recent drought shows that Wall Street is still baffled by the economic cost of environmental - and existential - risk

It's hard to overestimate the appalling environmental and economic crisis that's brewing in Brazil right now. The country is in the grip of a crippling megadrought - the result of pollution, deforestation and climate change - that deeply threatens its economy, society and environment. And the damage may be permanent: Sio Paulo, Brazil's largest city and industrial center, has begun rationing water and is discussing whether or not it will need to depopulate in the near future.

But if Brazil's drought is shocking, Wall Street's shortsighted approach to the country is appalling. Institutional investors' reports on the country - the seventh largest economy in the world - cite worries about inflation, government cutbacks and low consumer confidence. But I could not find a single analysis that mentioned the existential threat facing the country: the megadrought that is expected to last decades and could destroy the Brazilian economy. Not a single analysis cited the brutal global impact that this will cause.

Related: Political will is the biggest barrier to tackling global water risk