More is happening on sustainability every day. People, planet, performance is set against a policy background of the European Green Deal, in which the EU makes a legal commitment to climate-neutrality by 2050.
Sustainability is seen as a driver for “Encouraging business to frame decisions in terms of financial, environmental (including climate, biodiversity) social and human effects ensuring resilience and long-term value creation” – a broader and forward looking definition inspired by the European Commission’s definition and complemented with some important key aspects. Alongside environmental, social and human effects, FERMA does also consider the financial effects – positive as well as negative effects – as an important element in the decision-making. A decision-making with focus on resilience and value creation, two fundamentals of future proof risk management.
However, as for risk management also for sustainability there is “no-one-size-fits-all” solution. It’s important to have a right understanding of sustainability within the company – including the broader business environment and its stakeholders – and hence, to translate the sustainability definition to the company context, in view of an overall understanding and company-wide engagement.
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.
Thanks to Adriana Cavaliere & FERMA