Survey: Environmental Risk Gaining Attention, Still an Afterthought for Most
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 (EIU) survey of C-level executives, risk managers, senior vice presidents, heads of business units, and other senior managers.
Among the 320 CEOs, CFOs, risk managers, and others questioned for the global survey, the majority say that they are increasing the attention and resources that they dedicate to environmental risk management, EIU says. However, the findings also indicate that many companies are still at the early stage of this process and rarely consider environmental risk management formally when undertaking major strategic activities. 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.
Karl Russek, senior vice president for ACE Environmental Risk, says, “When companies are planning major strategic activities, the consideration of environmental risk remains the exception rather than the rule. Fewer than half of the respondents to the EIU survey say that they undertake a formal assessment of environmental risk when developing new products and services, and fewer than one in five when planning mergers and acquisitions.”
The findings form part of Under the Spotlight: the transition of environmental risk management, a new EIU survey and report, co-sponsored by ACE, KPMG, SAP, and Towers Perrin. The report examines current thinking around environmental risk management and explores the approaches that companies are taking to identify, assess, and manage the risks that they face, both within their organization and among their broader partner networks and supply chain. The report is available as a free download at www.eiu.com/globalriskbriefing.