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Sustainability > Step
Two - Manage |
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Risks
& Opportunities
Sustainability issues - environmental, social or economic - can present risks to organisations as well as opportunities that may contribute to their success. In general, sustainability risks and opportunities are not adequately covered by existing management approaches.
They arise from three principle areas:
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Operational risks and opportunities from your organisation’s operations. Opportunities can include savings from increased efficiency while risks may be regulatory or relate to local community or employee issues
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External risks and opportunities such as operating in a hazardous environment
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Relationship risks and opportunities: getting these right, by understanding and optimising the relationship between your organisation and its stakeholders, can provide many opportunities and minimise risks |
Managing sustainability risk and opportunity
Many organisations already have risk management processes in place. It is preferable to enhance existing processes by integrating sustainability within them. So what are the key stages of a sustainability risk management process?
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Gain top-level commitment and provide reassurance
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Define your sustainability risk strategy and appetite
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Risk boundaries and approach
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Identify significance of, and priorities for, market opportunities
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Roles and responsibilities |
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Timetables and milestones |
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Monitoring and review process |
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Identify and assess risks and opportunities. Consider not only those that meet the organisation’s objectives, but also those that are material to stakeholders |
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Agree and implement a risk management plan, which is best tied to existing processes initially. Risk and opportunity strategy reviews may indicate if additional processes are needed |
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Monitor sustainability risks and opportunities against wider sustainability policies, objectives and targets. Feed the information into management systems to update strategies and plans |
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Establish clear processes for communicating the risks and opportunities. Information and engagement should be designed to meet the needs of different internal and external stakeholders. |
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