The telecommunications sector is seen as the only ‘safe haven’ in a world where natural resource depletion is increasing liability and business interruption.

Natural capital, the ‘global stock’ of natural resources, is being depleted at a rate much faster than the planet can replenish it, which is leading to consequences that extend well beyond the direct effects on the environment.

These include direct consequences of natural resource depletion, the higher costs resulting from resource scarcity, possible new legislation, regulatory action around greenhouse-gas (GHG) emissions and water shortages, as well as pressure from communities and the wider society, a new report by Allianz Global Corporate & Specialty (AGCS) shows.

However, the telecommunications sector is believed to be the only low-risk service-related sector that can provide solutions for natural capital risk, including the provision of communication to avoid the carbon dioxide generated from business travel.

“There are tremendous opportunities for telecommunications companies to hedge natural capital risk in other sectors. Digital communication and management solutions can enable more efficient resource use,” says AGCS environmental, social and governance business services manager Chris Bonnet.

“Sectors with an inherent natural capital footprint often provide the necessary resources for manufacturing or other industries, so it is obviously harder for companies who operate in them to mitigate their natural capital risks. However, innovative risk solutions to reduce the stress to the environment could be more strenuously applied,” he adds.

His comments followed the release of the ‘Measuring and Managing Environmental Exposure: A Business Sector Analysis of Natural Capital Risk’ research report, which examines seven risks posed by the five natural capital factors, namely biodiversity, GHG and non-GHG emissions, waste and water, for 12 selected sectors.

“There is growing awareness, both in the media and the public, of how this is affecting the planet and these concerns are increasingly entering the political and economic spheres.”

There are four sectors – oil and gas, mining, food and beverage and transport – in the so-called danger zone, where risks generally cannot be mitigated by current measures.

The automotive, chemical, clothing, construction, manufacturing, pharmaceuticals and utilities sectors fall into the middle zone, where current strategies are roughly adequate to mitigate the risks.