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Risk managers don't know how to address environmental threats

06 October 2009

Risk management professionals in Europe are failing to acknowledge the levels of risk posed by environmental factors, it has been suggested.

Research conducted by insurance specialist Aon found that environmental threats are ranked lower in the region than any other area of the world.

The company has called on businesses to "wake up to the reality" that the EU Environmental Liability Directive (ELD) could lead to them being prosecuted for environmental damage.

Simon Johnson, Aon Environmental Director for the UK and Europe, the Middle East and Africa, explained: "The fact that environmental risk ranked 32nd as a concern in the survey is worrying because risk managers are seemingly lulled into a false sense of security."

He added that organizations should ensure that their pollution strategies are compliant with the ELD and they are prepared for the risk of a "one-off event" that could leave them liable for paying for clean up and restoration operations.

A recent study by insurer Aviva indicated that small firms in the UK are diversifying their operations as a result of the recession but are failing to assess the additional risk and put safeguards in place.

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