The Natural Resources Risk Index analyses the severity of impact and ease of management of the top 50 risks facing the natural resources industry. Grouped into five megatrends, we examine how these are impacting the sector currently and how this will change in the future.
The research is based on quantitative and qualitative interviews with some of the world’s leading natural resources companies, revealing the key risks that will shape the industry over the next ten years. The research dives deeper into each individual sector (Oil, Gas and Chemicals, Metals and Mining, and Power and Utilities) and drills down to a regional level, examining 11 geographies individually.
The megatrends of geopolitical instability and regulatory change, coupled with digitalization and new technologies, have created new risks for the natural resources industry to understand, navigate and mitigate. A changing industry landscape provides opportunities for companies willing to embrace a degree of risk. Below are some of the key themes to emerge from the research:
- The increasing spotlight on regulation – Companies need to proactively engage with government to shape the regulatory agenda.
- The growth of cyber-risk - Cyber-risk in all it varieties is now a boardroom issue for the industry. Continual reviewing of risk profile will aid developing resilience.
- The importance of big data - Companies need to embrace data-driven analytics to drive more effective decision-making in a faster, more connected world.
- Technological innovation - It is vital that risk management mitigation strategies are regularly evaluated to ensure they remain relevant and effective.
- The right risk management team - Risk functions must have the right breadth and depth of skills to help their organizations manage new risks and build flexibility.
- The increasing interconnectivity between people and risk - It’s critical that human resources and risk functions have a coordinated strategy to address issues.
- Human capital optimization - From a training and leadership perspective, companies need to keep investing in career and people development, with a long-term view.
- Reputational risk - When the market rebounds, prompting increased demand for talent, those companies that have damaged their reputations by poorly managed downsizing will struggle to find the right people and will ultimately face higher compensation costs to attract talent.