Sustainability at the heart of risk management
Sustainability has always been at the heart of the role of the risk manager, so that their organisations are resilient to shocks and can continue to fulfil their objectives. In the 21st century, that vision has widened, because companies are increasingly asked to be good corporate citizens and to play a part in our overall adaptation to climate change. FERMA’s aim this year has been to support and promote the risk manager in ensuring the sustainability of organisations as responsible business conduct and climate change are risk management issues.
FERMA argues that:
Companies should use an enterprise-wide approach to non-financial reporting, including the associated risks.
There should be clearer guidelines for non-financial reporting. Data need to be disclosed in a way that is meaningful and comparable. The Commission have created a ‘Corporate Reporting Lab’ to brainstorm methods to achieve this.
In response to the public consultation on the evaluation of the EU's Strategy on Adaptation to Climate Change earlier this year, FERMA made 3 recommendations.
Organise an EU-wide public access to climate-related risk data.
Promote professional risk management practice inside businesses and public entities.
Facilitate companies in making use of the available options for financing risks related to climate change
Following the October 2018 FERMA seminar in Antwerp, FERMA published a sustainability report which details lessons presented during the session on corporate conduct at the seminar. The report was sent to all attendees. It will be available to all on the FERMA website. FERMA plans to prepare a similar report to attendees of the 2020 FERMA seminar.
FERMA believes that the growing emphasis on the wider role of companies and other non-governmental organisations can gain from the unique skills of risk managers. Risk management is probably the only function that can bring together all the various roles involved in this process, including environmental risk management, human resources, compliance and investor relations, on an enterprise-wide basis.
FERMA will continue to work on this area, especially in the context of the application of ERM to environmental, social and governance-related risks (ESG).