BENEFITS OF ENTERPRISE SUSTAINABILITY RISK MANAGEMENT

v Achievement of balanced and integrated economic, social and environmental performance

v Full integration of sustainability based topics in business strategy, management and organization at all level corporate value optimization

v Reasonable assurance of achievement of corporate objectives in TRIPLE BOTTOM LINE concept

v Corporate risk optimization

v Effective and practical management of sustainability based risk

The enterprise sustainability risk management model helps managers in environmental management system, cleaner production, life cycle assessment and environmental accounting. These tools can be applied to reduce risk, decrease cost, identify opportunities and enhance business reputation and stake holder interest.

The findings of deloitte (2007) indicate that leading companies focus on following on critical factors in order to have a successful, long term sustainability programs, importantly the sequence in which these efforts are undertaken crucial to implementation success. The new enterprise sustainability risk management is designed as a conceptual process, consisting of five main phases as shown in figure below.

Phase 1 = Establishment of strategic orientation, to practice use of enterprise sustainability risk management model

ENTERPRISE SUSTAINBAILITY RISK MANAGEMENT MODEL

SUB STEPS PHASE 1

v Set tactical sustainability strategy, economic, social and environmental(TRIPLE BOTTOM LINE CONCEPT)

v Define business objectives in terms of sustainability

v Establish leadership

v Stakeholder exploration; identify stakeholder and stakeholder expectations

v Define approach, targets and plans

v Define company policy environmental, social and economic concerns

v Search modest advantage fields

v Look to create innovation-driven corporate sustainability benefit

v Examine processes from sustainability perspective

v Examine current risk culture in sustainability perspective

Phase 2 = Management and organizational infrastructural orientation

Objectives and related activities

v Integration of enterprise sustainability risk management into key corporate activities and purpose; sustainability based method

SUB STEPS PHASE 2 =

v Check and balance of infrastructural ailment related to corporate resources in view of financial, social and operative process

v Establish corporate possessions

v Develop guide line of enterprise sustainability risk management model

v Allocate enterprise sustainability risk management committee and arrangement of roles and responsibilities

v Evolve measurements and standards of business performance

v Explain personnel with enterprise risk management, corporate sustainability and integration of enterprise risk management and sustainability

v Develop and make better corporate culture, cooperative of sustainability(includes values, norms, communication, leadership style and conflicts

v Set up corporate sustainability performance standards

v Set up stake holder engagement plan and its process

Phase 3 = Set process step; framework orientation

Objectives and related activities

v Systemization of sustainability issue, corporate value drivers and related corporate practices by setting up risk management framework

SUB STEPS PHASE 3

v Categorize threats and prospects which effects enterprise sustainability

v Regulate sustainability issue’s affecting both tactical and operational risk which are related to not meeting and meeting business objectives

v Produce situation analysis for probable sustainability risk

v Prioritize sustainability based threats and opportunities

v Generate tactical plan to achieve business goals

v Examine impact, cost and benefits of sustainability based risks

v Prepare corporate risk map and holistic picture of company

v Exercise decision making to enhance risk handling options

v Implement risk treatment tactics for enterprise risk optimization

Phase 4 = Report and monitor; Internal control Orientation

Objectives and related activities

v Collection, exploration and distribution of risk data for relevant levels of management

v Communication and reporting in a timely manner

Part of the effort to assimilate origination for sustainability throughout the organization and, is achieved through regular communication, both within and outside the organization. A methodical procedure should be place to spread the word about any accomplishment being made, in as solid and calculable a way as likely, to stimulated everyone involved and give these associated with the company to boast about and identify with.

Phase 5 = Corporate sustainability check; Corporate sustainability orientation

Objectives and related activities

v Establishment of internal control of model and related activities toward effective implementation of sustainability practices

SUB STEPS PHASE 5

v Forming gap analysis performance optimization aimed at measuring and associating TRIPLE BOTTOM LINE based performance results and risk factors according to planned and desired enterprise sustainability risk management model

v Measure progress in the direction of sustainability goals

v Normalize overall score

v Correct approaches to make sure goals are met

This phase includes calculation of enterprise sustainability risk management implementation performance by control and measurement of sustainability variables according to determined criteria (Esquer-Peralta, 2006)

v Sustainability leadership

v Planning for sustainability enhancement

v Employee contribution

v Process management

v Product/service management

v Information and analysis management

v Customer, supplier and other stakeholder participation

v Sustainability result

An operative approach for sustainable development requires good management; it must provide co-ordination, leadership and administration financial control harnessing skills and capacities for ensuring adherence to time table

The roles, responsibilities and relationship between the different key participants in strategy process must be clearly defined and understood (ORGANIZATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, {OECD} 2009).

Date: 2015-01-02; view: 885