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MARINE CLAIMS | Environmental risk management In association with GRS
Much has changed in oil spill management since the Torrey Canyon, with learnings applied to other spills, including Exxon Valdez (inset) in 1989.
Mitigating ESG risks with spill response Pollution incidents often go beyond environmental impact, damaging corporate reputations and inflating claim costs. This reality makes proper response a vital part of marine risk management, writes Kip Radigan, Group Chief Executive Officer of Global Risk Solutions Group, the provider of property and casualty claims adjusting, complex/ large loss and environmental risk management solutions Marine industry professionals and their partners in the global insurance industry know that as ship traffic and transportation of oil increase, so does the risk of oil spills. When a spill occurs, losses often begin mounting immediately, impairing marine ecosystems, harming wildlife, disrupting coastal communities, and inviting litigation. Spill prevention is of course the preferred method to mitigate these losses, but when accidents happen – and all of us know they will – the next best action is an effective response. From the perspective of the marine insurance community – including hull and cargo underwriters, P&I clubs, brokers, surveyors and claims firms – spill mitigation is a critical element in marine risk management. But mitigating spills also is required under various pollution regulatory frameworks, and it therefore plays an important role in environmental, social and governance (ESG) programs. The Marine Insurer Claims Edition | September 2021
ESG is much more than a nice-to-say set of principles. Growing numbers of corporations of all sizes, in countries around the world, see ESG programs as strategically important to their growth and resilience. It’s also worth noting that growing numbers of regulators, investors and consumers see ESG in the same light. On a planet that is 71% covered by water, applying ESG values to marine activities is imperative.
RESPONSE REGULATIONS GROWING In the past 50 or so years, the management of environmental incidents such as spills of oil and other hazardous substances has become more and more regulated throughout the world. One of the signal events that led to major improvements in spill response was the wreck of the supertanker Torrey Canyon, which hit a reef off the coast of Cornwall in March 1967 and lost its entire cargo of crude oil. It spilled more than 100,000 tonnes, about 37 million gallons,
