Financial Provisions for Environmental Liabilities Practical Guide

20 Mar, 2023

The impact of direct environmental incidents as well as business insolvency resulting in risk to the environment must be protected against. In cases where there is either an environmental incident which results in actual/potential harm to the environment or where a company becomes insolvent and can no longer meet its obligations, suitable financial provision can mitigate or prevent an impact on both the environment and/or the public purse. 

In 2017, IMPEL Financial Provisions Project developed a practical guide in support of good regulatory process in financial provision that would better equip regulators and others to make informed decisions about financial provision. The practical guide has been produced by a team of experienced practitioners and academics covering the relevant law, insurance and technical fields. 

The guide was updated in 2018 to provide an evaluation of the potential for wider application of three methods for calculating the cost of unforeseen liabilities.

This practical guide is intended as a reference document for regulators. It does not prescribe what a regulator should do. Instead, it aims to provide information to assist regulators in making better decisions about financial provision for environmental obligations and liabilities. In this way, it should contribute to improved protection of the environment and the public purse, promote compliance with the polluter pays principle and encourage operator investment in pollution prevention.

Click here to download the practical guide.

The aim of IMPEL Financial Provisions Project is now to produce an online tool based on the practical guide. This will improve accessibility and allow capacity building in the cross cutting regulatory challenge of financial provision.

Click here for more information on IMPEL Financial Provisions Project.

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