Volkan Can, enterprise risk manager of a global building materials company, and board member of the Enterprise Risk Management Association of Turkey, explores why a comprehensive risk management strategy must take a proactive approach to ESG
In the dynamic landscape of contemporary business, the concept of risk has transcended its traditional financial connotations.
Beyond the balance sheets and profit margins, enterprises are beginning to comprehend the significance of their actions on the interconnected tapestry of society and the environment.
As an enterprise risk manager, it is imperative to realise that managing a company’s karma holds the key to ensuring sustainable longevity and fostering a harmonious relationship with the communities and environments in which we operate.
Gone are the days when corporate success was measured solely by short-term financial gains. In the pursuit of a more sustainable future, businesses are compelled to adopt a holistic approach that encompasses not only what they derive from the community and environment but also what they give back in return.
The principles of Environmental, Social, and Governance (ESG) serve as the cornerstone of this transformative shift, advocating for a deeper integration of responsible practices within the very fabric of the organisation.
Recognising that companies are not isolated entities but integral components of the larger societal ecosystem, it becomes evident that their sustainability is intricately intertwined with the well-being of the communities and environments they operate in.
“As an enterprise risk manager, it is imperative to realise that managing a company’s karma holds the key to ensuring sustainable longevity”
In essence, the fate of a company is inherently entwined with the perception of its karma by these very stakeholders. It is at this critical juncture that the role of effective risk management assumes an even more significant dimension.
Enterprise Risk Management (ERM) must take a proactive stance in embedding the ESG agenda as a central pillar of the organisation’s objectives.
This involves delineating clear key performance indicators (KPIs) and objectives that prioritise not just financial success, but also the creation of tangible value for the communities and environments impacted by the company’s operations.
Identifying and addressing governance-related issues becomes paramount in this pursuit, ensuring transparency, accountability, and ethical business conduct across all levels.
“Enterprise Risk Management (ERM) must take a proactive stance in embedding the ESG agenda as a central pillar of the organisation’s objectives.”
Moreover, a comprehensive risk management strategy should extend beyond the confines of individual business units and delve into the interconnected web of correlated risks that contribute to the company’s overall karma points.
Recognising the interdependence between the company’s actions and the well-being of the environment and society is pivotal in mitigating potential risks that could adversely impact the company’s reputation, trust, and ultimately, its longevity.
In conclusion, the evolving paradigm of risk management calls for a holistic recalibration of corporate values, where the notion of karma extends beyond the realm of spirituality and takes on a practical significance in the realm of business sustainability.
By integrating the principles of ESG into the core fabric of the enterprise, and by nurturing a culture of responsible governance, companies can pave the way for a more symbiotic relationship with their communities and environments, thus ensuring a sustainable legacy for generations to come.