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30% Higher Risk for Extractive Projects Near “Environmentally Sensitive” Sites

ESG technology platform RepRisk has found that infrastructure projects with in one kilometre (km) of an “environmentally sensitive” site are subject to 30% higher risks than projects 30 km away. RepRisk’s Geospatial Analytics dataset, which was launched six months ago, provides insights on three key datasets: the proximity of more than 65,000 extractive sector projects to over 300,000 environmentally sensitive sites, their owner and operator companies, and RepRisk’s ESG risk incident data. The firm examined the relationship between the three datasets to “discern a correlation between proximity and business conduct risk, in both company- and project-level regressions”. The analysis also found that ownership or operation of a project within 1 km of an environmentally sensitive site was found to have a “significant effect” on private and public companies’ environmental risk. This includes a 77% increase in risk incidents for public companies and a 27% increase for private. “Owning or operating one of these geospatially high-risk projects could serve as a red flag that the company is failing to manage environmental risks and point to wider environmental negligence,” said RepRisk “These results indicate that proximity matters.”

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