Navigating complex ESG challenges with the support of internal and external partners
Businesses across the world are prioritising Environmental, Social, and Governance (ESG) issues, focusing on preparation to mitigate risks and sharing their vision for future success. Many organisations are particularly focusing on the E of ESG as a matter of urgency.
Events such as Hurricane Ian hitting parts of southeast United States – which many experts argue was exacerbated by climate change – have brought climate-related challenges into stark relief. Global experts and leaders have also very clearly set this out at the recent UN COP27 Conference.
This is driving a swell of pressure for organisations to reduce their impact on the environment, including moving towards net zero emissions.
The role of risk managers
Increasingly risk managers are playing a key role in securing business resilience when meeting these sustainability goals. With their expertise and the support of relevant partners, they can be seen as facilitators of climate resilience rather than potential barriers to it.
Take the example of photovoltaic (PV) panels, just one of the many ways in which companies are looking to reduce carbon emissions and promote sustainability. Those driving sustainability initiatives and planning to install PV panels may not be fully aware of the new or increased risks, which may be introduced to the facility when this technology is installed.
Risk managers and partners will understand these risks and be able to advise on how best to facilitate the project and support sustainability, resiliently.
Collaborating with internal partners
One way to ensure that risk managers are involved in ESG initiatives at an early stage is for them to actively build a relationship with the Chief Sustainability Officer (CSO), or equivalent senior executive who directs a company’s ESG strategy.
For instance, risk managers can identify resources, data, and insight which may be valuable for the CSO. This can drive a mutually beneficial relationship and create more opportunities for risk managers to share opinions and suggestions with the wider C-Suite, potentially with the added weight of support from the CSO.
Look beyond your organisation
Risk managers could also look beyond their immediate organisations for insight and assistance. For example, if partners are also involved early in discussions, their expertise, research and data can be used to help find the right solutions for climate resilience – protecting today and prospering tomorrow.
Data-driven tools could also be valuable in initiating engagement with sustainability leaders, acting as a focal point for discussion and to support assessment and prioritisation of climate-related and ESG risks for a business.
Looking at the other side of climate resilience – how climate change impacts an organisation, rather than how an organisation impacts the climate – tools and data can support the greater integration of risk management in business decision making.
This includes prioritising investment in climate risk mitigation or potential relocation, if the risks present at a particular location are judged to present a fundamental risk to property and business continuity aspects, such as supply chain.
Similarly, data-driven tools, such as the FM Global Resilience Index can also support efforts to build resilience into supply chains – a vital consideration given the recent severe supply chain disruption many organisations have experienced.
Climate change will likely be the challenge that defines our age and one which risk managers will be on the front line of addressing and responding to.
By being a facilitator of internal engagement, and bringing relevant internal and external expertise, data, tools and solutions to the table, risk managers can drive the prominence of risk management with business executives, provide a positive contribution to the ESG agenda and support the journey to climate resilience.
Chris Hickin is vice president, operations engineering manager, London Operations, at FM Global