High-Risk Areas, Resources, and Sustainability

By N.A.J. Taylor on 1st May 2011 — 1 min read

Investing in conflict-affected and high-risk areas is a growing concern for responsible businesses and investors. Often companies based in developed countries operate in lesser developed foreign markets, where governance standards are lax, corruption is high, and business practices are poor. This chapter focuses on one specific Anglo-Australian company that operates in West Papua, one of the poorest provinces of Indone- sia. The risks for the company include the potential to contribute to environmental and social damage in a foreign market. The risks for investors include financing a company that does not get its risk man- agement right. This is the story of how and why the Norwegian Pension Fund blacklisted Rio Tinto.

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N.A.J. Taylor, ‘High risk areas, resources and sustainability’, in Cary Krosinsky, Nick Robins, and Stephen Viederman (eds.) Evolutions in Sustainable Investing:  Strategies, Funds and Thought Leadership, Wiley Publishers, U.S.: New York, December 2011, pp.329-44. [PDF]

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