Time for risk managers to step up to the plate on ESG risks, says Anra

Corporate sustainability is now a matter of “how” not “if” and must be fully incorporated into risk frameworks to manage the threats and maximise the opportunities, said leading members of Anra at the association’s recent record-breaking annual conference.

The event, which attracted a record 1,200 attendees to Milan, was heavily focused on sustainability and ESG issues.

The president of Anra, Carlo Cosimi, kicked off the conference by telling the audience of risk and insurance managers that the time has come for corporate sustainability to be seen as a positive business enabler rather than an issue that applies the brakes.

He told Commercial Risk Europe that sustainability will increasingly be at the heart of winning business models, becoming a part of corporate identity that will require risk management to step up to the plate.

“It will no longer just a matter of compliance,” said Cosimi. “As such, it will need to be integrated into existing risk management strategies and processes. I believe that risk managers will work very synergistically with their sustainability colleagues to deliver,” he added.

Fellow Anra board member and president of its technical and scientific committee Salvatore Lampone told the conference that sustainability is “less and less a subject of discussion”. “There is no ‘if’, but only a ‘how’,” he said.

Lampone said that Anra’s technical committee and board of directors have concluded that economic and financial performance is no longer the only measure to understand a company’s performance, with growing focus on “complex responsibilities” related to decisions, action and behaviour.

“These new objectives take into account a wide range of factors, such as environmental protection, the relationship with the territory, social justice and the ethical profile, and determine the creation of value and success,” said Lampone.

Anra stressed that companies are under increasing pressure to publicly communicate how they manage sustainability. And this all requires a change in corporate and risk management mindset, said Lampone

“The winning formula… must be to achieve a profound change within the company, with a view to a strong and convinced integration of thoughts and actions by the different areas of responsibility – board, risk, sustainability, HR, legal/compliance and CFO/DP, with a path that is expressed through shared strategic plans and objectives,” he said.

Lampone believes the challenge is to “harmoniously” bring ESG issues and risks into the general business risk framework by “implementing the risk management process with shared solutions and rules of engagement in compliance with the principle of accountability”.

He said companies therefore need to focus on quantifying ESG risks and opportunities in financial terms or through KPIs. They must also set their risk tolerances for different types of risk and rigorously implement action or risk reduction plans, he continued. Setting up reporting structures that escalate risk response to the right levels is another key goal, said Lampone.

The last session at the Anra conference looked at gender diversity and risk management. The roundtable discussion focused on an updated Anra report into equal opportunities in Italy within the risk management profession.

The research, drawn up by a group of Anra members, analyses the responses of 119 risk managers six years after the first report on the subject was published by the association.

The findings suggest progress has been made but more needs to done, and a clear difference of opinion between men and women over how big a problem diversity, or lack of, is in Italy.

“Six years after the first document, we generally note an improvement in the situation, especially within the risk management teams where the topic of diversity is perceived as an opportunity to create new talent and added value from both a gender and age perspective,” said Anra.

But the survey reveals that diversity is yet to be fully achieved. Forty percent of those surveyed still feel that the gender pay gap remains a problem, with around the same percentage feeling it is no longer an issue.

However, the survey shows that the difference in opinion breaks strongly by gender, with 80% of men considering the issue to no longer be a problem compared to 80% of women who think it still is.

Carolina Benaglio, Anra member and one of the report’s authors, said: “The gender gap is in fact still a risk and it is necessary not only to monitor it but also to mitigate it through active strategies and policies within companies.”

“This is also linked to ESG issues and to that S which is still, in my opinion, too underestimated,” added Bengalio, who is enterprise risk manager and CEO at MYR Consulting.

Anra president Cosimi was rightly pleased with the conference and work of his team.

“I am very satisfied with this edition: last year we already recorded a record attendance for Anra events, but this year’s results beat it even further,” said Cosimi. “It is a source of pride for me to have constructed very interesting speeches with personalities of international standing: all those who participated can in fact return home bringing with them a positive experience.”