A new report from Lloyd’s examines what companies operating in the Arctic need to do to manage the unique risks they face.

Expected investment in the Arctic could reach more than $US100 billion ($96.5 billion) over the next decade.

“However, given the high risk/potentially high-reward nature of Arctic investment, this figure could be significantly higher or lower,” it says.

The report describes the Arctic as a “complex risk environment” and finds that although there are diverse opportunities such as energy extraction, shipping and tourism, potential investors face many pitfalls.

The main uncertainty is global climate change, says the report. In addition, major investment in infrastructure and surveillance is needed to allow safe economic activity.

Arctic development can also be “politically contentious”, with opposing interests and perspectives at local, national and international levels.

Lloyd’s CEO Richard Ward says risk management activity has a “critical role” in helping businesses, governments and communities manage the uncertainties and minimise risk.

“Companies operating in the Arctic require robust risk management frameworks and processes that adopt best practice and contain worst-case scenarios, crisis response plans and full-scale exercises,” the report says.

However, it says companies do not need to recreate their risk management frameworks, but must ensure that these frameworks consider the complex and fast-changing nature of the Arctic risk environment.