Using Risk as a Lens for Sustainability Decision-Making
Dispatch from SSC President Jennifer Woofter
I often tell clients that sustainability is not a stand-alone concepts, but a lens through which companies can make good business decisions. It's another set of criteria, another flowchart of questions, that lead to optimal choices.
That said, sustainability is not a perfect lens in and of itself. Sure, there are sustainability concepts and frameworks (like materiality, zero waste, and The Natural Step) that aim to provide guidance on how to think about sustainability, and protocols on how to use sustainability to make decisions. But I find that it's often lackluster -- at the end of the materiality process, or the Natural Step "ABCD process" we often look around the table and say "okay, that seems reasonable, but what does it mean for ACTUAL planning for next quarter? And what does it tell us about changes needed for next year's budget?"
Here is where risk, and it's associated tools, comes in. By marrying traditional risk assessment, mitigation, and adaptation methodologies with sustainability concepts, we can start to answer questions like:
- How likely is it that climate change is going to have a significant impact on our operations in the next three years?
- How big of an impact is water scarcity going to be for our supply chain in the next decade?
- How resilient is our business to labor unrest in Asia?
- Of all the options for adapting to increasing sustainability regulation, which ones are likely to be the most effective?
There is SO MUCH WORK to be done at the intersection of sustainability and risk. It's really exciting work, and if you've done any reading on the subject lately, I'd love to hear your thoughts in the comments below!