In response to the challenges of the past two years, the business world is becoming increasingly focused on risk, particularly mitigating catastrophic risk in a new business landscape. As we move forward, the business sustainability challenges of the past are unlikely to be the surprise detailers of the future. Thus, business needs an expanded view of risk.
Business risk and mitigation seems to be everywhere these days. Our professional consulting has observed financial reference points dominating the business sustainably risk conversation. While financial risk is certainly a very legitimate concern, lessons learned over the past few years lead us to believe that traditional financial risk will not be what keeps us up at night.
In a recent article, How to assess and Mitigate Risk, the author discusses some myths about future risk, from a financial perspective.
• The biggest risk my company faces is financial risk
• My company is safe because we review risks and prioritize mitigation efforts annually
• We are good at risk-sensing because we have invested in enterprise risk management (ERM) systems
• Our risk assessment is comprehensive because we account for likelihood and impact
• We are well protected because we have a strong quantitative model to measure risk
• We can sense and protect business better because we manage risks at the business unit (BU) level
Interacting on a daily basis with companies in the midst of recovery, our sustainability consulting has observed first-hand how business sustainability risk can affect a company and its stakeholders. While many traditional risks appear obvious looking back, some hidden and intangible threats may still be in hiding and prove to have future impacts.
Sustainability’s hidden threats to traditional business models may soon present themselves. At Taiga Company, our professional consulting resources work directly with organizations seeking to address business sustainability risk and remain on the opportunistic end of sustainability.