8  Risks, Mititgation, and Positive Impacts

Section Overview

Duration	Slides	Materials	Key Points
60 min	Section 6	Central Park Bee example	Risks can and need to be monitored and, where possible, mitigated.

8.1 Environmental and Social Risks

This section begins by clarifying the key concepts of environmental and social risks. Make sure to read through the notes on the slides before. This handbook section is a bit shorter as the slides themselves are text heavy and include detailed information in the notes to each slide. Try to come up with a few examples that fit your local context. This can be a nice addition to what your participants might identify.

Environmental and social risks can over time develop into financial risks for the enterprise. That is one of the reasons why it is important to keep a close eye on them.

These slides should illustrate that all businesses are embedded in an environmental and social context. Paying attention to and taking care of that context is a crucial part of being a responsible, and successful, business. You should also make the participants aware of increasing scrutiny in many land use sectors, such as forests and agriculture, as well as marine or coastal sectors. Prepare some examples of news headlines, ideally from your context, to illustrate this point.

Definition

Deforestation

Deforestation refers to the clearing, removal, or destruction of forests or wooded areas, primarily for agricultural expansion, urban development, logging, or infrastructure projects. Deforestation leads to the loss of forest cover and the conversion of forested land into non-forest uses, resulting in significant environmental impacts such as habitat destruction, biodiversity loss, soil erosion, water pollution, and climate change. It is a major concern for global environmental conservation efforts.

Definition

Soil Degradation

The deterioration of soil quality and health, often caused by human activities such as deforestation, agricultural practices, and improper land management. Soil degradation results in a decline in fertility, erosion, and a loss of the soil’s ability to support plant and animal life.

Definition

Chemical Overuse

Chemical overuse refers to the excessive or inappropriate application of synthetic chemicals such as fertilizers, pesticides, and herbicides in agricultural, industrial, or residential settings. It occurs when chemicals are applied in quantities higher than necessary or when they are used without proper consideration for their environmental and health impacts. Chemical overuse can lead to various negative consequences, including soil degradation, water pollution, biodiversity loss, harm to beneficial organisms, development of pesticide resistance, and adverse effects on human health. Sustainable agricultural practices and integrated pest management strategies aim to reduce chemical overuse and minimize its environmental and social impacts.

8.1.1 E&S Risk and Impact Framework

Risk Monitoring is not only done by individual businesses but also of high interest to investors and regulators. The E&S Risk and Impact Framework is a good illustration of what these stakeholders think about when talking about risk management and can serve as an idea for your participants.

8.1.2 Assessing Identified Risks

Once risks are identified, a business needs to assess them. To do so, an enterprise needs to evaluate the likelihood that a risk materializes and its potential impact.

But you should calm them a little and stress that they do not need to perform risk analysis at the level of an international investor. It is sufficient that they know of its importance and know how to carry it out for some of the key risks their business might face.

8.1.3 Risk Management and Mitigation

Discuss what risk management and risk mitigation mean.

Additional Resource

UN Disaster Risk Reduction Terminology

Important

The slide “Risk Assessment Example - Central Park Bees” needs to be tailored with an example fitting your context.

8.2 Going from Negative to Positive Impacts

Mitigating risks is not where the journey has to stop! Restoration businesses can do a lot to go from preventing negative impacts to generating positive ones. End this section on a high note so that your participants do not become too demotivated by possible risks that their business faces. Highlight the possibilities that successful risk management can bring.