The guide is set against a policy background of the European Green Deal, in which the EU makes a legal commitment to climate-neutrality by 2050
FERMA has released a guide specifically for European risk managers on sustainability risks. People, planet, performance - The contribution of Enterprise Risk Management to Sustainability provides practical guidance on incorporating sustainability goals into enterprise-wide risk management.
The European risk association has taken examples of good practice of sustainability risk management from leading risk managers to produce the guide. It is set against a policy background of the European Green Deal, in which the EU makes a legal commitment to climate-neutrality by 2050.
Chair of the FERMA sustainability committee, Valentina Paduano, said: “Part of the role of risk managers is to translate these initiatives into their implications for their organisations in terms of risks and opportunities.”
According to the FERMA Sustainability Committee, this means encouraging businesses to frame decisions in terms of financial, environmental (including climate, biodiversity), social and human effects ensuring resilience and long-term value creation.
Sustainability risk management is a business process supporting the company’s sustainability goals. It aims at aligning sustainability with risk management by using the principles of enterprise-wide risk management.
Some risk managers have been doing this for years, but the corporate maturity level is very mixed in terms of managing sustainability. The guide will support risk managers as by showing how a sustainability risk management process can be linked to strategic goals and risk appetite. It also includes:
- A sample risk register/catalogue incorporating sustainability-related risks, such as environment, social and governance (ESG) issues;
- Possible approaches to risk assessment, and
- Guidance on risk communication, reporting and disclosure.
Paduano commented: “One of the tools of the risk manager, Enterprise Risk Management, provides a robust framework to identify and manage the impacts and opportunities coming from our evolution to sustainability. We believe that People, planet, performance will contribute to sustainability and, therefore, the resilience of our companies.”