Local Resource Risks in Developing Countries Can Trigger Global Risks: Report

LONDON, United Kingdom

Local resource risks -- like water stress, land-use change, food security and energy instability -- in developing countries have the potential to trigger “political and economic risks that quickly spread to the global economy,” according to the new Earth Security Index Report.

The report, “The Earth Security Index 2015: Managing global resource risks and resilience in the 21st century,” launched last week in London by strategic consulting firm the Earth Security Group, includes insights on how to achieve sustainable development, a multi-dimensional country risk dashboard to navigate complex resource risks, and seven blueprints that identify priority risks affecting business and government interests in several key commodities and geographies.

The report includes four key points. First, pressures in both the BRICS (Brazil, Russia, India, China and South Africa) and MINT (Mexico, Indonesia, Nigeria and Turkey) economies will amplify global risks, but also provide opportunities for sustainable investment.

The combined risk profile for all nine countries highlights four critical issues -- quality and availability of water, land-use change conflicts, the stability of energy supplies, and exposure to extreme weather events that can amplify the other three pressures.

The report calls for more central consideration in country risk analyses, and urges companies and governments to considering where sustainable investments are most needed.

The second key point is that the security of global commodity supplies requires multinational companies and governments to build social and environmental resilience in their supply chains. The third cites the need for multinationals to reduce their exposure to tensions by using business diplomacy to advance sustainable innovation.

The report’s final key point is that that regional markets are exposed to trans-boundary sustainability pressures, and so public-private collaboration across borders is required. 

“2015 is a critical year for sustainable development,” Professor Jeffrey Sachs, director of the Earth Institute at Columbia University and director of the United Nations’ Sustainable Development Solutions Network, said at the report’s launch.

The new index “takes a look beneath the surface and finds that all is not well,” he added.