Environmental risk and remediation in focus in Italy

Sustainability is a wide-ranging subject that encompasses all the impacts of business on society, the environment and the workforce. It is a trend that will influence the strategies of companies in all industries during the next few years, and will become the acid test of enterprises’ financial credibility. Tackling sustainability in all its peculiar aspects is a major challenge and requires both the ability to have a comprehensive vision of the business and to explore the relevant risks in detail. One of the most important aspects of sustainability is environmental risk, which in Italian legislation is primarily governed by the Consolidated Environmental Law (Legislative Decree no. 152/2006). This law unifies all national regulations on environmental protection and waste management, in addition to the raft of European legislation introduced over time. One of the aims of the regulatory framework is to educate and foster environmental culture, something that it is hoped will be long-lasting and embedded long after law is enacted. Before these values and culture become well-established good practice, there is a risk that companies focus more on formal compliance rather than on the need to fully face the risk. Since 2006, the sensitivity of companies and society in general to environmental issues has increased in Italy and across Europe, which is good news. But companies, however, still tend to exploit green aspects primarily for reputational purposes and – in the event of damage – for managing any reputational fallout. Many businesses still have poor knowledge of the repercussions and costs associated with environmental risk, and are not very interested in the contribution that can be offered by the insurance sector. Aldo Bertelle is well aware of this. He has worked as a manager in various insurance companies and as an environmental management system (EMS) auditor (ISO 14001 or EMAS), before he founded Environmental Risk Shield Solution (ERiSS) Italia. Mr Bertelle is also the creator of RemBook (Handbook of Remediation), a decision-making support tool for which the National Register of Environmental Operators and leading environmental events organisation RemTech Expo have signed a memorandum of understanding. This was recently submitted to the Ministry of Ecological Transition, for its planned implementation this year. Environmental policy Based on the lines defined by the Ministry of the Environment (now the Ministry of Ecological Transition), Italy is in line with global standards related to environmental protection and climate change. The six main challenges identified by the ministry are focused on the fight against climate change and reduction of pollutants, the protection of nature and water, the end of land consumption, the prevention of landslides and floods, the prevention of, and fight against, environmental damage, the transition towards a circular economy and zero waste, as well as the reduction of fines imposed on Italy by the European Union. Coverage gap Businesses play a fundamental role in the effort to reduce pollution, and ESG policies also include this aspect. The sensitivity of companies to this risk has certainly increased over time and many have adopted risk control and mitigation measures. Still too often, however, companies overlook the fact that it is also necessary to remedy a site after a fire or a flood, in order to remove combustion residues or contaminated sludge carried by currents. The issue of insurance coverage therefore remains open. There is a big gap between the companies in possession of a fire policy and those with a pollution policy. The latter are in the order of thousands. The number of the former is higher by two or maybe even three orders of magnitude. This gives a strong indication of how much ‘pollution risk’ coverage can grow. Environmental risk solutions Environmental insurance solutions cover many needs, from disaster and environmental risks up to policies aimed at promoting sustainable mobility or the production of renewable energy. The pollution risk, as described above, accounts for approximately 0.5% of the total environmental insurance products. In general, we can say that the insurance offer is more focused on products with a social sustainability component and less on protection from pollution. Insurers also have the opportunity to put themselves forward as problem solvers rather than as merely asset safeguard guarantors. Normally, companies lack the competence to handle unexpected events. If an insurer includes crisis management support in the services offered, then it can fulfil its role as an insurer to the fullest. There is still a long way to go but the goal is extremely important, shifting from price to value as the crux of the negotiations for the purchase of a real risk management service. The potential in this regard is considerable and relates to the possibility of sharing the risk assessment tools that already exist, for example, by integrating the insurance instrument into an EMS. Memorandum of understanding It is no coincidence that the idea that led to the creation of RemBook came from the insurance sector. As early as 2003, when the first hardcopy edition of the Handbook of Remediation was published, the aim was to offer a tool for selecting the best possible operator to be entrusted with the remediation. The database established over the years collects the information provided by operators via an annual questionnaire. It features a total of 50 criteria, helpful not only to profile the respective skills but also, thanks to data aggregations, to analyse the characteristics and trends of the remediation sector. It is estimated that, in 2020, the remediation of contaminated sites in Italy recorded a turnover of about €2bn, with 18,000 remediation interventions, of which 20% were for environmental emergencies. The importance of the tool, for the community as a whole and therefore also for government organisations, lies in the potential for making and planning informed choices based on a large number of specific data on the subject of soil remediation.

Environmental risk and remediation in focus in Italy

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