One of the common statements that came from the COVID-19 era was that the pandemic was a “dress rehearsal” of the global problem of climate change. Human actions over the last dozens of decades have accelerated global warming, which is having catastrophic impacts not just on the greenhouse gasses emitters but the entire planet. All about ESG risk consultants just below.
This realization has made governments, regional blocs, capital markets and international organizations start rethinking the looming sustainability threats.
Now, new laws, policies, rules, and commitments are being passed to help reduce the threats, but it is never easy for many companies. Sustainability threats are, in many instances, not very easy to identify and address for managers, but the risks are dire and you cannot be left behind.
You should seek the assistance of sustainability experts for calculating ESG Score + giving ESG consulting services.
Read through the post to learn more about environmental, social and governance (ESG) risks and why every corporate or business and, indeed, the entire planet is at the tipping point and it is getting late to adopt sustainability management.
To do your part in company management, the post also outlines major reasons why you need to work with ESG risk consultants.
Stakeholders, including customers and employees, often seek transparency through ESG reporting to support ethical companies.
ESG Risks Materialize with Catastrophic and Expensive Impacts
Like other business threats, it is crucial to identify ESG risks and craft the best methods or environmental, social and governance (ESG) strategy for mitigating them. The danger is that if the local and sustainability risks are not identified and addressed on time, they materialize with catastrophic global and local impacts.
At this stage, efforts to mitigate the risks often run into trillions of dollars for companies, countries and the planet at large. Even with insured risks, the losses from ESG-related threats/ issues have shot up by a huge margin in the recent past, affecting the respective firms or companies.
Let’s highlight some of these impacts, which indicate the importance of acting right away by working with professional sustainability and ESG risk consultants. Note that the case studies touch on almost all the three pillars of sustainability: environmental, social and governance (ESG).
- In 2010, BP’s Oil rig Deep-water Horizon exploded and caused an environmental disaster, which resulted in major risks for biodiversity, poeple and business. The ultimate cost for cleaning up and fines for the problem cost a whopping USD 65 billion. This is a huge cost that can easily push a company into bankruptcy or force it out of the market altogether. In addition to the company losses, the lost biodiversity accelerated the risk of pushing animals into the threatened categories.
- In 2011, Thailand was hit by flooding, which caused a huge disruption to the tech and automotive supply lines. According to the World Bank, the estimate for the damages incurred was about USD 46 billion. This was a result of the current risks of global warming and climate change, resulting from failure to adopt reliable solutions.
- Recently in 2020, poor governance saw Volkswagen cars recalled after the discovery and admission that they lied about emission tests. The scandal resulted in hefty penalties, fines, buybacks and financial settlements of approximately USD 33.3 billion. This is one of the issues accelerating the problems of global warming.
This list can go on and on, and the big question that should ring in every manager or leader’s mind is “How can one avoid such issues or risks?” The answer is working with ESG risk consultants services for the best solutions to every sustainability risk.
Specific ESG Risks that You Should Know
ESG risks that we have highlighted above only capture the latest outcomes and the truth is that you cannot afford to wait for the threats or issues to materialize in your business. It is time to work with the best climate or ESG consulting firms to learn and adopt the best solutions.
Before looking at how the ESG risk consultants can help, it is important to list the specific ESG risks.
These risks can be categorized into three main areas:
These risks and threats refer to an organization’s impact on the environment. They include:
- Waste disposal.
- Carbon footprint.
- Impact on biodiversity.
These risks relate to how a company or business impacts the people working in it, neighborhoods and the entire supply chain. They can be pretty diverse, including:
- Human rights violation.
- Wage equality.
- Supplier-vendor practices.
- Data privacy.
These perils are related to how an enterprise operates, including its governance policies. They include:
- Environmental, social and governance (ESG) disclosures.
- Transparent communications.
- Board structure and its diversity.
- Compensation of the executive staff.
Why You Should Work with ESG Risk Consultants
When one reads through the risks listed above, it is clear that every enterprise needs a professional hand in managing them. Most companies today are finding managing the ESG risks challenging because they are focused on reinventing their operations after the extended period of financial challenges caused by COVID-19.
Therefore, the best way out is by working with ESG risk consultants. Check out the additional reasons below:
The Experts Help You to Understand Specific ESG Risks Facing Your Company
Every company or business out there is different, and so are the ESG risks. Working with ESG risk consultants, therefore, can help you to learn and pinpoint the specific risks associated with your enterprise’s operations.
For example, a manufacturing firm might have more risks associated with waste disposal and its impact on biodiversity than a banking institution, which might focus more on social impacts.
Helping with Compliance to Avoid Associated Penalties
The whole idea of risk management is never easy for most managers, but it is a critical component for success. The services of ESG risk consultants can help you to appreciate these threats by looking at the associated data and, more importantly, craft reliable solutions to address them.
You do not have to wait until your company is declined listing in the capital markets for failure to make accurate sustainability disclosures. In other cases, this could mean hefty penalties, but you can avoid them with the assistance of ESG risk consultants.
ESG consulting helps in defining the best strategy for sustainability. You will learn how to define the risks, draw strategies for reducing them, and report to stakeholders. The compliance also includes sustainability reporting to ensure that stakeholders access and read accurate information.
ESG Risk Consultants Make It Easier to Operate Proactively and Achieve Your Goals
When risk management is added on top of other dozen things, from product development to marketing, it can easily distract the company from its core goals. You do not have to veer off the track because there is a way to achieve both sustainability compliance and manage the related risks.
ESG reporting : Your roadmap in 2023
In today’s global business landscape, companies face the urgent challenge of climate change and the need to adopt sustainable practices. As climate change becomes a critical concern, businesses must integrate sustainability into their core strategies and operations to reduce carbon emissions and address environmental risks.
To achieve this, consulting firms offer their expertise to guide businesses in developing comprehensive climate change strategies that not only mitigate risks but also uncover new opportunities for growth and innovation.
Our consulting experts assist in creating a sustainable performance report, showcasing the company’s progress in reducing its carbon footprint and achieving its climate goals.
Effective climate change management requires a clear and differentiated strategy that aligns with the company’s purpose and values. By optimizing operations, supply chain, and product mix to reduce greenhouse gas emissions, businesses can contribute to a greener future while enhancing their own efficiencies and cost-effectiveness.
Climate change and new goals
Embracing transformative partnerships and engaging stakeholders are essential to ensure success in sustainability efforts and build stakeholder support for the company’s initiatives. Through these initiatives, companies can capitalize on new opportunities in the energy transition and position themselves as leaders in a post-carbon world.
Recognizing climate change as both a risk and an opportunity, forward-thinking companies are adopting sustainability as a core aspect of their business strategy.
They realize that embracing green operations not only reduces costs but also attracts customers, enhances reputation, and attracts top talent. The low-carbon transition provides businesses with a chance to innovate and thrive in a rapidly changing world.
By setting clear goals and integrating environmental, social, and governance (ESG) considerations throughout their organization, companies can transform their business models and unlock trillions of dollars in low-carbon opportunities.
As sustainability gains momentum, executive leaders are increasingly investing in sustainability initiatives and viewing them as a source of competitive advantage. They recognize that sustainability strategies not only protect their organizations from disruption but also optimize and reduce costs while creating short- and long-term value.
Sustainability programs have become essential drivers of growth, enabling businesses to thrive while positively impacting society and the environment.
Embracing sustainability and defining clear ambitions and goals are essential for businesses seeking long-term stakeholder value and success in the modern business landscape.
ESG risk consulting : move with us and get a free report
Working with ESG risk consultants can help you to take advantage of the best innovative approaches in management to achieve the targeted results cost-effectively.
Take the example of a company targeting to cut down its carbon footprint. ESG risk consultants can help to reveal the awesome yet cheap strategies such as installing energy-saving lamps, using smart energy management systems, and proactive maintenance.
These are quick solutions with impressive results, and they help to showcase the long-term journey of, perhaps, changing the entire facility to run on clean energy. You can also count on the consultants to learn how to perfect ESG reporting.
The risks facing the planet today are threatening everyone, from people to businesses therein, and it is crucial for every party to play its part to address them. As a corporate entity, you have the duty to identify and manage the risks prudently to avoid the impacts of the threats.
One of the leading ESG risk consultants, is willing to come to your aid, helping with calculating ESG Score + giving ESG consulting services. Contact them now to learn more about ESG risks, craft strategies for managing them, and improving ESG score.