Integrate or Die

Integrate or Die

Integrating sustainability into finance and risk management strategies will help companies capture growth in the face of shifting customer, capital market and regulatory demands, says  Lucy Nottingham, Director, Global Risk Center, Marsh & McLennan Companies, in a new report titled ‘Unlock Growth by Integrating Sustainability: How to Overcome The Barriers’

Key Takeaways

  1. The rising pressures of a changing physical environment present a wide array of strategic and operational risks to many companies. Executives must ask themselves: How sustainable is our business, and are our strategies and operations at risk?
  2. Customers, capital markets, and regulators are increasingly examining corporate sustainability risk profiles. The focus on sustainability and climate-change-related practices will affect both the cost and availability of financing for many companies.
  3. Companies must identify, assess and respond to the strategic and operational risks and opportunities presented by the changing business environment.
  4. Yet there are often disconnects between established corporate finance modeling and enterprise risk management processes and the discourse and expertise surrounding sustainability issues.
  5. Three factors contribute to the organizational gap between finance and enterprise risk management and sustainability: unclear terms, unclear roles and risk responsibilities, and unclear corporate leadership and engagement on sustainability.
  6. Companies that do not close this gap may find themselves losing ground in an increasingly competitive global marketplace.
  7. Leading companies have leveraged sustainability initiatives to raise capital and reduce operational costs and volatility.
  8. Finance, enterprise risk and sustainability leaders must integrate their efforts to provide real value in helping their organizations respond to evolving risks and capture competitive advantages.

“When your CFO is well-versed in sustainability, it goes a long way.”

“Establishing a common core language relating to risk and resilience clarifies the issues that are deeply tied to business operations.”

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