The Global Risks Report 2020 by the World Economic Forum and other authorized sources have indicated a rise in environmental and social risks to the point that they are now threatening our businesses, economies, and societies in general.
Companies must establish solid bonds between financial and nonfinancial performance and eliminate any gap with stakeholder expectations. They must also build a stronger structure to drill down on risks arising from climate change, inequality, and breach of human rights, along with their opportunities, and inculcate a rigorous approach to nonfinancial reporting processes and checks to foster trust.
ESG factors are included in the company’s risk map to this end. They are also analyzed in detail to grasp the context of each of them and be able to predict their associated impacts and likelihood. Defining roadmaps to mitigate and pivot to them is one of the core goals and initiatives being developed in this area.