Darim keeping on top of constantly changing legislation

Regulation has become an increasingly onerous part of the corporate world and one that carries its own risks – from non-compliance to reputational damage. However, keeping track of all legislation across each industry is an impossible task for a risk management association.

Nevertheless, Darim has decided to address this challenging issue and discussing with members what resources could help with the ever-increasing burden that is compliance.

The working group is led by Henriette Scotwin Guespereau, head of ERM at A.P Møller-Mærsk, alongside Henrik Almind Vind, head of risk management at Danish packaging manufacturer Broedrene Hartmann, and Charlotte Hedemark Hancke, risk management expert at SAP Danmark, Darim board member and current president of Ferma, the European risk management association.

The group initially looked at which regulations and legislative acts are the most important to Darim members. This was asked of two different parts of the membership – those that are concerned with insurance and placing coverage, and those that are in charge of ERM.

One topic that came up, among the avalanche of regulations, was ESG. More specifically, companies are concerned about the relatively recent introduction of sustainability disclosure frameworks, as well as the threat of ‘greenwashing’ and being accused of disingenuously claiming sustainability credentials.

The level of required disclosure may be dependent on the type of industry and the product offerings involved. And on paper at least, it has elevated the risk manager’s position within the company. “The whole ESG reporting area has made ERM so much more important while also increasing the need for collaboration between sustainability, ESG and risk teams,” said Hedemark.

But how will this collaboration work in practice? What will the risk manager be responsible for and what will the sustainability team be expected to do? According to Guespereau, the ESG or sustainability team will do the ‘inside-out’ work while the risk manager will manage the financial side as well as the quantitative work involved.

“We have the methodologies and frameworks to do this. We have a list of pre-defined risks available through the topics and we can assess the potential financial impact from those through the existing ERM process,” said Guespereau.

“We can collaborate more with insurers and brokers on identifying the relevant legislation but we cannot cover everything,” added Guespereau. “We will rely on the advocacy work done by Ferma. For Darim, there is a value to be part of that and to make sure we have a risk-based approach to regulatory compliance.”