This paper concerns a pragmatic approach to a problem that is
common to many operations in the mining industry: how, over
the short-term, to grasp the extent and distribution of long-term
financial risk from environmental causes and reduce these risks
strategically, in order to maintain stability and flexibility in the
operations. Surprisingly, many companies operate without an
environmental master plan or tools that can help managers
measure and reduce financial risks. Such companies may be
subject to unknown unacceptable financial risks from
environmental causes. While many companies have some kind
of internal system of environmental standards, it is often the case
that such systems have uneven or limited effect, and offer no
opportunities for visualising, measuring or managing aggregate
financial risks from environmental causes. `Aggregate risks' are defined here as the calculated total
expected financial costs to a company, or a subdivision of a
company, from environmental causes at nominated operations
over a defined time period. Aggregate risks take into account the
type and magnitude of an environmental problem set, the
likelihood of occurrence, and the time frame during which the
problems will develop or solutions are required. For the large
corporation, the 'amount of' aggregate environmental risk is a
statistic that can be managed, along with other financial
parameters, at the corporate level to improve the stability and
predictability of operations, and protect the interests of
shareholders. This paper concerns development of a management framework
and a tool for the large corporation that responds to the need for
managing aggregate environmental financial risks. The logical
framework proposed to overcome the need for strategic vision is
the Environmental Master Plan, and this is described in the next
section. The analytical tool proposed to measure aggregate risks
and provide relevant data and insights to managers, is called an
Environmental Risk Management Information System, and its
mechanics are described in a subsequent section.