Allianz Measures Natural Capital Risks in a Recent Report

Globe with construction cones surrounding it

October 25, 2018 |

Globe with construction cones surrounding it

In a recent report, titled Measuring and Managing Environmental Exposure: A Business Sector Analysis of Natural Capital Risk, Allianz Global Corporate & Specialty delved into so-called natural capital risks, which it defined as, "the global stock of natural resources, including soil, clean air, and groundwater, as well as biodiversity." The report said that "many objective scientific and macroeconomic indicators [are showing] that natural capital is being depleted at a … faster rate than the planet can replenish it—and with consequences that extend well beyond the direct effects on the environment."

The report said that as a consequence of a number of factors, such as shortages or new legislation, organizations are becoming increasingly aware of their role in the equation. In the report, Allianz explored the related risks and available mitigation options.

The report examined 12 sectors—Automotive, Chemical, Clothing, Construction, Food and Beverage, Manufacturing, Mining, Oil and Gas, Pharmaceutical, Telecommunications, Transportation, and Utilities—and classified them into 3 categories as follows.

  1. Danger zone: sectors where risks are generally greater than mitigation
  2. Middle zone: sectors where risks are roughly matched to mitigation
  3. Safe haven: sectors that generally do not seem to face high risks and/or are reasonably well prepared

The report suggested seven risks surrounding five factors of natural capital as follows.

Seven Risks Surrounding the Five Factors of Natural Capital

Five Factors

Seven Risks


  • Dependency on biodiversity
  • Impact on biodiversity
Greenhouse gas emissions
  • Impact through greenhouse gas (GHG) emissions
Non-GHG emissions
  • Impact through Non-GHG emissions
  • Impact a company has through its waste
  • Dependency on water
  • Impact on water

Finally, the report created a natural capital risk profile for each of the 12 sectors referenced above. Each sector profile examined "the average level of natural capital risk and mitigation within a sector, distinguishing between the seven risks around the five natural capital factors" listed above and examined the emergence of natural capital risks and their impacts on a business' bottom line.

The report concluded that while, ultimately, the "corporate world" has a better understanding of natural capital overall, the "associated business risks remain underexplored."

October 25, 2018