Owning a business has always been about managing risk. Each year, the World Economic Forum's Global Risks Report surveys businesses, governments, civil society, and leaders to understand the threats that impact organizations the most. In 2018, four of the top five risks were environmental or social, including weather extremes, water crises, natural disasters, and climate change.

To highlight ESG risks and opportunities for companies and organizations around the world, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the World Business Council for Sustainable Development (WBCSD) have released the Guide to Applying Corporate Management to Environmental, Social, and Governance-related Risks. It is designed to increase the resilience of organizations in the face of the severity of ESG-related risks.

"When companies better understand their risks, they can make better business decisions - usually with more sustainable results." - Peter Bakker, President and CEO of WBCSD.


1) Impact the main operations or products

2) Have the potential to damage a company's intangible value, reputation, or ability to operate

3) They are followed by the media, organized stakeholders, and public policy debates that could increase the risk to the company's reputation.


Decision makers: Guidance creates awareness that ESG requires effective decision making.

1) Risk management practitioners: those with a role in the Enterprise Risk Management (ERM) process to help understand the types of ESG-related risks and provide tools, resources, and support structures.

2) Sustainability professionals: to integrate their knowledge and awareness of ESG-related trends, impacts and dependencies with ERM tools and processes.

In the document there is important information for small and medium-sized enterprises. SMEs should adopt a common-sense approach that uses available resources efficiently.


The goal of the guidance is to help organizations achieve:

1) Enhanced resilience: the medium and long-term viability of an entity will depend on its ability to anticipate and respond to risk.

2) A common language to articulate ESG-related risks: ERM identifies and assesses risks impacting business strategy and objectives.

3) Resource Implementation: Obtain relevant information about ESG-related risks to assess and optimize resource needs.

4) Search for ESG-related opportunities: Considering the positive and negative aspects of ESG-related risks, management can identify new opportunities.

5) Perceived efficiencies of scale: Managing ESG-related risks centrally and better allocating resources

6) Improved disclosure: Provide the transparency that investors expect.

Is your entity ready for the ESG-related risks of today and tomorrow?

Climate Change Affects Everyone

Climate is eclipsing governance and social issues at the top of the ESG agenda, reflecting both the existential threat of rising global temperatures and the race against time to control it. Everyone must take responsibility and do their part. That is why ESG practices have become a key determinant of business and investment. 2022 will prove this.

An ESG rating provides the company's look at the impacts it causes, and the opportunity for society to know what it does to mitigate them, to produce with respect and sustainability. For an organization to move towards net zero, it must seriously rethink the effects of climate change on its business, also corporate diversity and equity, its role in defense of ecosystems and biodiversity.

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