Risks from tech to climate challenge natural resources firmsReprints
Operating in more technically challenging physical environments is the biggest risk facing the natural resources sector, according to research by Willis Towers Watson Group P.L.C. released Tuesday.
Willis Towers Watson surveyed 350 executives from natural resources firms in the first half of 2016 to create its first natural resources risk index.
The other risks that executives ranked in their top 10 in descending order were:
• Currency and interest rate fluctuations
• Increased cyber security and data privacy risk
• Natural disasters and epidemics
• Technology opening marketplaces to disruptors
• Vulnerability to reclamation obligations
• Increased complexity of regulation
• General shortage of industry-specific skills
• Difficulty in attracting and retaining key talent
• Uncertainty over, and encroachment of, climate change and environmental policy.
“Certainly geopolitical instability and regulatory change, coupled with digitalization and new technologies, have created new risks for the industry to understand and mitigate,” Nick Dussuyer, head of natural resources at Willis Towers Watson in London, said in a statement. “Expanding into new, more demanding areas without overexposing businesses to risk is a top challenge for today's executives.
“Unearthing new stores of natural resources has become an increasingly challenging task,” Mr. Dussuyer said. “It requires producers to adapt to ever-more-demanding environments and technically complex projects during a period when the pressure to create returns and provide the highest possible operational efficiency is greater than ever. The cost of getting things wrong is also at an unprecedented high.”