External stakeholders may not objectively assess the risks of the corporations operations caused by a lack of information and understanding of the corporation’s activities. Need for communications strategy including education of risks and actions being taken. 12 5
Reaction orientated risk management strategy Management of the potential reaction of different stakeholders after an emission has occurred. Goal is to increase level of certainty about reactions of various stakeholders – Reduce the asymmetric distribution of information between parties impacted by the emission – Communication and dissemination of information is critical – Resolve disputes in an objective manner where practicable 12 6
The Seven Rules of Effective Risk Communication 12 7 1. Accept and involve the public as a legitimate partner in the decision making process 2. Listen to your audience 3. Be truthful, honest, frank and open 4. Coordinate, collaborate with other credible sources 5. Meet the needs of the media 6. Speak clearly and with compassion 7. Prepare, plan carefully and evaluate your communication performance
What is sustainability? 12 8
Environmental sustainability Environmental sustainability is defined as responsible interaction with the environment to meet the resource and services needs of current and future generations without compromising the health of the ecosystems that provide them. It is the response of an ethical business to the demands of diminishing finite natural resources and impact of industrialisation on the environment. It supports the other components of sustainability since a healthy environment is essential for social and economic wellbeing. 12 9
Economic benefits of environmental sustainability 13 0 Encourages business process re-engineering with improved efficiency and lower costs using fewer resources including greater energy efficiency, improved waste management, lower cost transportation and packaging Increases competitive advantage where customer buying preferences favour businesses with a better environmental performance Encourages innovation of new products and services that meet the increasing demand for socially and environmentally conscious alternatives and adaptability to meet changes in the environment Improves access to capital from share and debt markets as investors shift preferences to low carbon businesses (transition risk and ESG) Contributes to management actions which prevent attracting greater regulatory supervision and/or penalties and fines Increases the ability to attract talent and be an employer of preference Improves stakeholder engagement and decreases reputational risk
What is ESG? Environmental, Social and Governance (ESG) Criteria is a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Environmental criteria look at how a company performs as a steward of the natural environment.
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- Spring '18
- risk principles