ARLINGTON, Va., July 05, 2016 (GLOBE NEWSWIRE) -- Executives in the natural resource industry said difficulties arising from operating in more technically challenging physical environments is the leading risk to their business, according to a new Natural Resources Risk Index and top 10 ranking released today by Willis Towers Watson (NASDAQ:WLTW), a leading global advisory, broking and solutions company.
“Unearthing new stores of natural resources has become an increasingly challenging task,” said Mark Oakley, head of Willis Towers Watson’s Natural Resources, North America. “It requires producers to adapt to ever more demanding environments and technically complex projects during a period when the pressure to generate returns and provide the highest possible operational efficiency is greater than ever. The cost of getting things wrong is also at an unprecedented high.”
The industry executives named currency and interest rate fluctuations, and increased cybersecurity and data privacy risks as the ensuing top risks to their business. Natural disasters and epidemics, technology that opens up the marketplace to disruptors, and vulnerability to reclamation obligations round out the top six risks.
“The survey results show that the industry is united on its views of the key risks it faces today and over the next 10 years,” said Oakley. “Certainly geopolitical instability and regulatory change, coupled with digitalization and new technologies, have created new risks for the industry to understand and mitigate. At the same time, a changing industry landscape provides opportunities for companies willing to embrace a degree of risk.”
The survey also showed that executives are clearly troubled by shifts in the way that today’s governments approach regulation. In the next decade, it is likely government regulation of the industry will increase. “If companies want a role in shaping the regulatory agenda, they need to engage proactively with government and other key stakeholders, and put forward their point of view,” said Oakley.
Industry leaders are also concerned about the risks associated with digitalization and new technologies. Companies’ growing dependency on IT infrastructure has ushered in a litany of new risks. “In all its varieties — from unintended data breaches to cyberterrorism — cyber-risk is now a boardroom issue for the industry — one that executives would never have dreamed of, 20 or even 10 years ago,” said Oakley.
The global research found marked differences between how organizations in different regions view risk, with the number one perceived risk varying significantly across the world. North American natural resource leaders are preoccupied with increased cybersecurity and data privacy risks. In Europe, the risk posed by operating in more technically challenging physical environments was highlighted as the principle concern. In South America, uncertainty over climate change and environmental policy was the top concern.
The index was compiled using responses from 350 C-suite executives across the natural resource industry — including oil, gas and chemicals, power and utilities, and metals and mining — to rank 50 risks in accordance with their impact and how difficult each one is to manage.
Notes to editors
Willis Towers Watson’s Natural Resources Risk Index 2016 was compiled with responses from 350 C-suite-level executives, across the full spectrum of sectors, including oil, gas and chemicals, power and utilities (including renewable and nuclear energy), and metals and mining. Among those who participated in the survey, conducted in the first half of 2016, were 70 CEOs, 60 CFOs and 60 CROs. Willis Towers Watson also conducted in-depth interviews with selected executives to gain greater insight into the risks they face. A full copy of the research including infographics that can be republished on request is available here.
About Willis Towers Watson
Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 39,000 employees in more than 120 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.
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Source:Willis Towers Watson Public Limited Company