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Sustainability risk

management.

When a company is going to include

ESG criteria in its business model,

it’ll come up against a

series of opportunities

and risks.

We must analyse these

risks depending

on our sector

or industry.

There are many types.

A very simple example

is reputational risk,

anything a company can do

that has a negative impact

will have direct consequences

on its brand image.

Regulatory risk,

if the company fails to comply

with a regulation or law,

there’ll be negative

consequences such as

fines or sanctions.

Supply chain

risk,

for example,

having a very small number

of suppliers that may not

be sustainable and stop

supplying your

production chain.

We also have

environmental risks,

such as a series

of catastrophes,

lack of natural resources,

etc., that could

interrupt production.

Technological risks,

such as any

technology failures that

affect communication

with our customers

or cybersecurity.

There are various tools that

can be used to evaluate

and prioritise risk

management

such as a

SWOT analysis,

which looks at all

our company’s strengths,

weaknesses, opportunities

and threats.

We also have a series of management

frameworks where we can

analyse how to best use

our resources to

resolve a risk.

A company can identify

opportunities to

mitigate the risks

it has identified.

For example,

they can diversify the

supply chain,

create contingency plans

or adopt a proactive regulatory

compliance approach.

What does this mean?

Continuously monitoring

current legislation that is

applicable to our sector

to make sure that the company can

fulfil all its

sustainability plans.

With everything it has learnt so far,

the company can create

a strategic sustainability plan,

design an action plan

and monitor

its performance.

From this point,

the company will be more

competitive and respected on the

market, as being sustainable

in the long term and responsible

over time gives companies

a competitive edge.