Risk managers urged to facilitate sustainability debate

Risk managers have a critical role to play in helping their organisations address sustainability risk, according to risk managers speaking at the launch event of a new guide from Ferma. Ferma launched its first guide to managing sustainability risks this week. Based on the experiences of senior risk managers, it provides practical guidance on incorporating sustainability goals into enterprise-wide risk management. Launching the guide, Ferma’s chief executive officer, Typhaine Beaupérin, said enterprise risk management can make an important contribution to sustainability. She noted there is a growing focus on economic and social sustainability. Europe has set an ambitious goal of becoming carbon neutral by 2050 under its Green Deal, while sustainability is being embedded in upcoming governance and accounting rules, said Ms Beaupérin. However, most risk managers are not yet engaging with sustainability in their day-to-day roles. According to a Ferma survey in 2020, some 60% of risk managers are not yet involved in their organisation’s approach to the issue. Speaking on the webinar, Adriana Cavaliere, corporate risk manager at Belgium’s air traffic controller Skeyes, said risk managers can act as a “facilitator” for sustainability, building bridges and helping integration into companies’ risk strategies. “Risk managers are facilitators. In fact, I would go further. Risk managers are the corporate glue. The catalysts that can enable a sustainability conversation,” she said. Ms Cavaliere said companies now need to go beyond traditional risk management and become more predictive. She advises risk managers to look at what might happen in terms of sustainability and translate this to their own company. “It is important to have out-of-the-box thinking and a scenario approach. The better you understand the global evolution and the impact on your own company, the better you can help the company with options and suggestions to adjust strategy,” said Ms Cavaliere. Risk managers can support the board and senior managers to help them understand the risks of inaction on sustainability risk, such as losing market share, explained Valentina Paduano, chief risk officer and sustainability director at European automotive group Sogefi, and one of the guide’s authors. “Risk managers can support their organisations as they develop a broader risk appetite for sustainability. But this is not part of most organisations today,” she said. Risk managers need to look at the opportunities and the risks of sustainability, according to Ms Cavaliere. There will be “uncertainty” in sustainability, which will require risk managers to consider different outcomes and opportunities to minimise losses from the worst-case scenarios, she continued. A good risk manager has one eye on present risks and the other on the future, she added. Risk managers should also take a broad view of sustainability, which means different things to different companies, or even within companies, said Ms Cavaliere. “Often, companies make the mistake that everyone understands sustainability in the same way. Which is not true. It is important to define what sustainability is about in your company,” she said.

Risk managers urged to facilitate sustainability debate

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