Magazine article Risk Management

Corporate Sustainability

Magazine article Risk Management

Corporate Sustainability

Article excerpt

At the 2002 World Summit on Sustainability in Johannesburg, South Africa this August, Andrew Savitz, partner of the sustainability services practice at PricewaterhouseCoopers in Boston, was in attendance to discuss his firm's recent survey on the topic, as well as to network with other sustainability experts. Business sustainability is about weighing with equal importance the environmental, social and economic impacts of business operations, and considering the overall impact of these factors on an organization's ability to succeed long term. Risk Management Magazine spoke with Savitz about this idea and how it is being embraced worldwide.

RM: How is sustainability being addressed internationally as compared to the United States?

Savitz: U.S. companies are a little bit behind the rest of the world in addressing these issues. Sustainability is a concept that has started to become embedded-certainly in Europe and in certain Asian countries-but it still is an evolving concept here. Companies in the United States are saying, "We recognize this is important and we know it has a big impact on our reputation, but we are not systematically evaluating sustainability risks and opportunities."

RM: Why do you think that is?

Savitz: There are a couple of reasons. The social and economic concepts are relatively new and evolving. Many companies are grappling with how to measure the social impacts of their operations. One of the interesting debates is over the parameters of business responsibility versus government responsibility. No clear lines have been defined. Big parts of the summit covered poverty, hunger, AIDS and the lack of sanitary drinking water. What role should the corporate world play in helping to solve these problems? That's the macroissue. The microissue is: "How do we as an enterprise look at these issues to some degree and how do we measure them?"

Another issue is that the people who understand that this is important aren't necessarily the people who are in charge of evaluating other risks within the company. Sustainability risk has not been incorporated into the existing risk evaluation processes of companies. Typically, companies will look at the environmental issues, but they are still grappling with how to look at the social and economic issues. …

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