Natural resources such as clean air and fresh water are vital for businesses – and at the same time massively at risk across many industry sectors today. Failure to manage the earth’s natural resources or “natural capital” has consequences that extend beyond direct effects on the environment.
For businesses, it can also bring new interruption and liability scenarios which can wipe out profits and impact business models, as resource scarcity, regulatory action and pressure from communities and wider society grows, warns Allianz Global Corporate & Specialty (AGCS) in a new report Measuring And Managing Environmental Exposure: A Business Sector Analysis of Natural Capital Risk. According to analysis from the insurer, the oil and gas, mining, food and beverage and transportation sectors rank highest in terms of natural capital risk exposure.
“Companies around the world are increasingly confronted with the negative implications of natural capital depletion,” says Chris Bonnet, Manager, Environmental, Social and Governance (ESG) Business Services, AGCS. “Sustainable use of natural resources is critical for the future success of most businesses. Yet while corporates’ awareness of their natural capital footprint is growing, many still need to gain a better understanding of the specific threats that can impact their industry sector and company in particular,
as well as the mitigation options available.”