Corporate Financial Risk Profiles of Environmental Impairment

Financial risk of environmental problems is the key to many important business decisions within the mining industry. Massive uncertainty makes it difficult to choose a strategy for managing environmental problems to reduce corporate financial exposure to environmental impairment. A correct and practical method exists to clarify the risks and help make decisions. A case study on an insurance problem illustrates the method.The approach used is to translate existing data on environmental problems into probabilistic expressions of financial risk, and organise the expressions to reveal alternative solution strategies for the insurance problem.