BRUSSELS: The key environmental risks

Research conducted by StrategicRISK in association with ACE highlights some of the issues relating to environmental liability that are taxing corporate risk professionals. In this Euro Forum discussion, our panel discussed some of the findings of that research and drew upon their own experience of dealing with the impact of environmental risks.

Currently, it seems to be historic contamination that is causing the biggest problems, particularly in terms of costs. However, our participants were well aware that what is today’s seemingly manageable environmental risk could be tomorrow’s major legacy liability. With the relentless introduction of ever more stringent national and international environmental legislation, the world’s largest corporations need to have global standards that will hopefully meet some if not all of the requirements that may emerge in the future.

The new EC Environmental Liability Directive is posing some issues, with the inclusion of liability for destruction or impairment of habitats. The hard to quantify nature of biodiversity – how much is one species of flora or fauna worth compared to another species? – also provides food for thought.

The insurance industry is responding to these new potential liabilities but there are still relatively few players in the specialist environmental risks marketplace. However, it does appear that a risk transfer solution for biodiversity damage in Europe is feasible.