Survey: Risk Management an Ad hoc Activity
Stakeholder pressure, the complexity of business relationships, and the threat from climate change are the three main factors encouraging companies to assess more carefully the environmental risks that they face, according to a new Economist Intelligence Unit survey co-sponsored by the ACE Group of Companies.
Among the 320 risk managers questioned for the global survey, the majority say that they are increasing the attention and resources that they dedicate to environmental risk management. However, the findings also indicate that many companies still are in the early stage of this process and rarely consider environmental risk management formally when undertaking major strategic activities.
The findings show that, to date, this category of risk has tended to be managed either as an ad hoc activity or separate from the overall risk management framework.
"Environmental risk management is rising on the corporate agenda, but many companies are in the early stages of addressing this issue," said Rob Mitchell, editor of the report. "While there are some companies that take environmental risk very seriously and have developed robust processes to identify, assess, and mitigate their exposure, others continue to manage environmental risks in an ad hoc way, and do not consider them when planning major strategic activities, such as mergers and acquisitions."