Natural risk

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Deforestation in Europe, 2018. Almost all of Europe's originsl forests have been removed Deforestation central Europe - Rodungen Mitteleuropa.jpg
Deforestation in Europe, 2018. Almost all of Europe's originsl forests have been removed

Natural risks or nature risks are risks recognized in risk management that are related to the loss of natural assets. They may impact businesses or economies by impacting directly on operations or by negatively affecting society in a way that then creates market risks. The loss of nature can also contribute to systemic geopolitical risk because nature's assets and services, such as clean air, plentiful fresh water, fertile soils, a stable climate, provide vital public goods on which human societies rely for their functioning. An example is tropical deforestation. It is a key source of nature risk for sectors that either have an impact or dependency on tropical forests. [1]

Contents

Examples of impacts

See also

Related Research Articles

<span class="mw-page-title-main">Deforestation</span> Conversion of forest to non-forest for human use

Deforestation or forest clearance is the removal of a forest or stand of trees from land that is then converted to non-forest use. Deforestation can involve conversion of forest land to farms, ranches, or urban use. The most concentrated deforestation occurs in tropical rainforests. About 31% of Earth's land surface is covered by forests at present. This is one-third less than the forest cover before the expansion of agriculture, with half of that loss occurring in the last century. Between 15 million to 18 million hectares of forest, an area the size of Bangladesh, are destroyed every year. On average 2,400 trees are cut down each minute.

<span class="mw-page-title-main">Palm oil</span> Edible vegetable oil from fruit of oil palms

Palm oil is an edible vegetable oil derived from the mesocarp of the fruit of the oil palms. The oil is used in food manufacturing, in beauty products, and as biofuel. Palm oil accounted for about 36% of global oils produced from oil crops in 2014. Palm oils are easier to stabilize and maintain quality of flavor and consistency in ultra-processed foods, so are frequently favored by food manufacturers. On average globally, humans consumed 7.7 kg (17 lb) of palm oil per person in 2015. Demand has also increased for other uses, such as cosmetics and biofuels, creating more demand on the supply encouraging the growth of palm oil plantations in tropical countries.

<span class="mw-page-title-main">Resource depletion</span> Depletion of natural organic and inorganic resources

Resource depletion is the consumption of a resource faster than it can be replenished. Natural resources are commonly divided between renewable resources and non-renewable resources. Use of either of these forms of resources beyond their rate of replacement is considered to be resource depletion. The value of a resource is a direct result of its availability in nature and the cost of extracting the resource, the more a resource is depleted the more the value of the resource increases. There are several types of resource depletion, the most known being: Aquifer depletion, deforestation, mining for fossil fuels and minerals, pollution or contamination of resources, slash-and-burn agricultural practices, soil erosion, and overconsumption, excessive or unnecessary use of resources.

<span class="mw-page-title-main">Cargill</span> American-based international food conglomerate

Cargill, Incorporated, is an American global food corporation based in Minnetonka, Minnesota, and incorporated in Wilmington, Delaware. Founded in 1865, it is the largest privately held company in the United States in terms of revenue.

Sinar Mas is one of the largest conglomerates in Indonesia. It was formed in 1938. It has numerous subsidiaries including Asia Pulp & Paper and palm oil producer PT SMART. The company also acquired Berau Coal Energy from Asia Resource Minerals PLC, a major mining group founded by Nathaniel Philip Rothschild, in a takeover initiated by Fuganto Widjaja.

<span class="mw-page-title-main">Environmental issues in Indonesia</span>

Environmental issues in Indonesia are associated with the country's high population density and rapid industrialisation, and they are often given a lower priority due to high poverty levels, and an under-resourced governance.

<span class="mw-page-title-main">Sustainable forest management</span> Management of forests according to the principles of sustainable development

Sustainable forest management (SFM) is the management of forests according to the principles of sustainable development. Sustainable forest management has to keep the balance between three main pillars: ecological, economic and socio-cultural. The goal of sustainable forestry is to allow for a balance to be found between making use of trees and also maintaining natural patterns of disturbance and regeneration. The forestry industry mitigates climate change by boosting carbon storage in growing trees and soils and improving the sustainable supply of renewable raw materials via sustainable forest management.

<span class="mw-page-title-main">Environment of Indonesia</span>

The environment of Indonesia consists of 17,508 islands scattered over both sides of the equator. Indonesia's size, tropical climate, and archipelagic geography, support the world's second highest level of biodiversity after Brazil.

<span class="mw-page-title-main">Deforestation of the Amazon rainforest</span>

The Amazon rainforest, spanning an area of 3,000,000 km2, is the world's largest rainforest. It encompasses the largest and most biodiverse tropical rainforest on the planet, representing over half of all rainforests. The Amazon region includes the territories of nine nations, with Brazil containing the majority (60%), followed by Peru (13%), Colombia (10%), and smaller portions in Venezuela, Ecuador, Bolivia, Guyana, Suriname, and French Guiana.

This article addresses various criticisms of Cargill Inc, a privately held "agribusiness" multinational giant" with operations in 70 countries and its headquarters in Minneapolis, Minnesota, in the United States. Cargill Inc, which has been owned by the Cargill family for 154 years, is the largest privately owned corporation in the United States, with an annual revenue of $113.5 billion in 2019.

Palm oil, produced from the oil palm, is a basic source of income for many farmers in South East Asia, Central and West Africa, and Central America. It is locally used as cooking oil, exported for use in much commercial food and personal care products and is converted into biofuel. It produces up to 10 times more oil per unit area than soybeans, rapeseed or sunflowers.

Wilmar International Limited is a Singaporean food processing and investment holding company with more than 300 subsidiary companies. Founded in 1991, it is one of Asia's leading agribusiness groups alongside the COFCO Group. It ranks amongst the largest listed companies by market capitalisation on the Singapore Exchange (SGX), being the second largest as of September 2010. It was ranked 211th in the Fortune Global 500 list in 2020. It was ranked 3rd in the World's Most Admired Company by Fortune in 2019.

<span class="mw-page-title-main">Deforestation in Indonesia</span>

Deforestation in Indonesia involves the long-term loss of forests and foliage across much of the country; it has had massive environmental and social impacts. Indonesia is home to some of the most biologically diverse forests in the world and ranks third in number of species behind Brazil and the Democratic Republic of Congo.

<span class="mw-page-title-main">Roundtable on Sustainable Palm Oil</span> Agreement on palm oil supply

The Roundtable on Sustainable Palm Oil (RSPO) was established in 2004 with the objective of promoting the growth and use of sustainable palm oil products through global standards and multistakeholder governance. The seat of the association is in Zurich, Switzerland, while the secretariat is currently based in Kuala Lumpur, with a satellite office in Jakarta. RSPO currently has 5,650 members from 94 countries.

Royal Golden Eagle is a global integrated, resource-based industrial group, with businesses in paper, palm oil, viscose, construction and energy, property and asset management. Owned by Indonesian businessman Sukanto Tanoto, the group employs 60,000 people worldwide with assets exceeding US$30 billion.

Stranded assets are "assets that have suffered from unanticipated or premature write-downs, devaluations or conversion to liabilities". Stranded assets can be caused by a variety of factors and are a phenomenon inherent in the 'creative destruction' of economic growth, transformation and innovation; as such they pose risks to individuals and firms and may have systemic implications. Climate change is expected to cause a significant increase in stranded assets for carbon-intensive industries and investors, with a potential ripple effect throughout the world economy.

<span class="mw-page-title-main">Palm oil production in Indonesia</span>

Palm oil production is important to the economy of Indonesia as the country is the world's biggest producer and consumer of the commodity, providing about half of the world's supply. In 2016, Indonesia produced over 34.6 million metric tons of palm oil, and exported 25.1 million metric tons of it. Oil palm plantations stretch across at least 12 million hectares. There are several different types of plantations, including small, privately owned plantations, and larger, state-owned plantations. There are a variety of health, environmental, and societal impacts that result from the production of palm oil in Indonesia. A recent publication by the NGO Rainforest Action Network (RAN) indicates that the use of palm oil by some of the biggest chocolate and snacks' producers is increasing this problem.

Agricultural expansion describes the growth of agricultural land especially in the 20th and 21st centuries.

<span class="mw-page-title-main">Climate change in Indonesia</span> Emissions, impacts and responses of Indonesia

Due to its geographical and natural diversity, Indonesia is one of the countries most susceptible to the impacts of climate change. This is supported by the fact that Jakarta has been listed as the world's most vulnerable city, regarding climate change. It is also a major contributor as of the countries that has contributed most to greenhouse gas emissions due to its high rate of deforestation and reliance on coal power.

<span class="mw-page-title-main">Endangerment of orangutans</span>

There are three species of orangutan. The Bornean orangutan, the most common, can be found in Kalimantan, Indonesia and Sarawak and Sabah in Malaysia. The Sumatran orangutan and the Tapanuli orangutan are both only found in Sumatra, Indonesia. The conservation status of all three of these species is critically endangered, according to the International Union for Conservation of Nature (IUCN) Red List. 

References

  1. "Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy" (PDF). World Economic Forum. January 19, 2020.
  2. Tacconi, Luca; Zahrul Muttaqin, Muhammad (July 20, 2019). "Policy forum: Institutional architecture and activities to reduce emissions from forests in Indonesia" (PDF). Forest Policy and Economics. 108: 101980. doi: 10.1016/j.forpol.2019.101980 . Retrieved March 7, 2021.
  3. Yusuf, Arief; Roos, Elizabeth; Horridge, Jonathan (September 2018). "Indonesia's Moratorium on Palm Oil Expansion from Natural Forests: Economy-Wide Impacts and the Role of International Transfers". Asian Development Review. 35 (2): 85–112. doi: 10.1162/adev_a_00115 .
  4. "Rethinking food and agriculture 2020-2030". RethinkX. September 2019.
  5. "Deforestation-driven reputation risk could become material for FMCGs" (PDF). Chain Reaction Research. May 9, 2019.