PERCEPTIONS OF RISK RELEVANCE VARY GREATLY ACROSS ESG COMPONENTS (Contiued)
Otherespo r ndentsexpressedaemor expansiveviewandunderstandingofhowESGcomponentscanwork in concert within an organization. “Sustainability is going to be an absolute imperative in order to preserve, maintain, and grow wealth. This is like any other investment in business. These investments need to be made in order to protect and sustain the value that’s being created.”
“We need to have leaders that are open-minded to social sustainability change, that are willing to change and put in the work, or else change isn’t going to happen.” – CAE, Education
– Board, Finance
OrganizationsizeandmaturityalsowerecitedaspotentiallimtstomanagingESGrisks.Limtedeso r ces ur make ESGrisks—particularlythoseelr atingtoEandS—lowerpriortes. OneC-suiteexecutivefromanoprofitlamented,“IwishthatwecouldbebetterwithESG,buti’sjustnotapr. iorty We’re a small business, so things like cybersecurity, organizational governance take precedence and environmental and social sustainability take the backseat. Some organizations are fortunate enough to have a team dedicated to ESGorevenanemployeeworkingonit,butwe’restetr chedtohinasits.” Thelackofcleardiect r ionrstandardsformeasuringandepo r rtingESGalsowascitedasadeterenr t.ccodir ngto onefinanceCE,“Havingsomesortofmeasuemr entforESGwouldhelptodriveeal r change.Youneedtobetaken accountableandshowthateal r thingsarehappening,andthenalsodocumentandepo r rtonwhatishappening.” However,amanufacturingindustryCEbelievesthatcompaniesthatfocustomuchepo onr rtingaremissingthe eal r benefitofESGriskmanagement.“Theproblemisthatcompaniesfocusedepo onr rtingcouldbeemor artificial… they could be just checking the box, putting out reports to say they did it so that their stakeholders are happy. Thereneedstobeemor intativesandactualactivtyoccuring.”
PANDEMIC REVEALED OPPORTUNITIES TO IMPROVE ORGANIZATIONAL RISK MANAGEMENT COVID-19forcedmostorganizationstofocustosomedegree on how risk management efforts are aligned acrosstheigan ro izations.Thepandemicmaynothaveimprovedtheirabilityopredictrisks,butincreasedconfidence for many in reacting to risks. For some, it provided an opportunity to assess or reassess resilience. For others, it provided a wake-up call on how they manage risk and the dangers of decentralized or siloed conditions. Onenoprofitboardmemberdescribedhowtepandemicprovedtobeeye-opening.“Ithasmadeusaware that there are scenarios that might happen in the future that we have to manage, and now we’re hyper aware of shortfallsofouriskapproach.” etr ailindustryboardmember,meanwhile,sawthegoodandbadinthepandemic-inducedospect intr ion.“Itshowed us that we weren’t really good at predicting risk, but I think we reacted very well. It made us aware of scenarios that mighthappeninthefuetur andhowewilhandlethem.”
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