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Roundtable on “Risk Management in Sustainability and Human Rights”

June 19th, 2018: Risk management is an increasingly important business driver and stakeholders have become concerned about risk. An enterprise-wide approach to risk management enables an organisation to consider the potential impact of all types of risks on all processes, activities, stakeholders, products, and services. Many organizations are implementing Enterprise Risk Management (ERM) processes to increase the effectiveness of their risk management activities, with the ultimate goal of increasing stakeholder value.  Integrating ERM with strategy-setting is the fundamental approach as most of the risks starts with the company’s strategy and business objectives. While companies have identified several risks (such as compliance risk, financial risk, currency risk, operational risk etc.) in most cases we do not find sustainability and human rights as risk factors. 

Since 2011, the cluster of the interconnected environment and societal risks such as extreme weather events, climate change, and water and food crisis have consistently featured among the top-ranked global risks in the World Economic Forum’s Global Risk Reports. For India, failure of climate-change mitigation and adaption was ranked 5th concern for doing business by the World Economic Forum‘s Executive Opinion Survey 2017. In contrast, the World Economic Forum Global Risk Report 2018 does not recognize or capture the global risk that arises from Human Rights perspective. All companies worldwide have a responsibility to respect human rights, regardless of their size, structure or sector. This basic societal expectation was confirmed and substantiated with the adoption of the Guiding Principles on Business and Human Rights (‘Guiding Principles’) by the United Nations Human Rights Council in 2011. Respecting Human Rights means that businesses should not infringe on human rights and that they respect the dignity and fundamental rights and freedoms of all individuals affected by their activities, products or services. Interpreting this within the context of ERM framework will require a rethinking to the present discourse. Both Sustainability and Human Rights have not been included in mainstream risk management processes of companies in India.

It is against this background that IIMB- CCGC hosted a half-day roundtable to discuss issues and challenges related to ERM especially in the context of Sustainability and Human Rights. This roundtable was part of a part of the research projects undertaken by Prof. Padmini Srinivasan, and Prof. Vasanthi Srinivasan from the IIMB Centre for Corporate Governance and Citizenship.

This event was attended mainly by risk and sustainability professionals across the sectors. Insights gathered from this discussion will provide inputs for the research project on environmental sustainability and human rights.