Sustainability & Enterprise Risk Management:
Managing Economic, Social, Environmental and Cultural Risk Improves Sustainability and Business Performance for Multinational Companies
Insightful economic, social and cultural risk assessment of Africa and other emerging regions is gaining prominence at many multinational companies as a critical component of an integrated Corporate Social Responsibility (CSR), sustainability and Enterprise Risk Management (ERM) framework. Many companies seek to address risk management more holistically and readily see the connectivity between CSR and risk management given the increasingly global nature of many businesses today and the ever-increasing need to expand into new areas, be it for critical supply of resources or new markets.
Competition and other forces are driving many companies to expand into international markets in search of lower costs, access and proximity to resources and new opportunities. Upon arrival, businesses are often confronted with a myriad of risks and CSR issues including labor, economic, environmental as well as many cultural complexities of doing business in an unfamiliar territory. An important challenge for many multinational CEOs, CSOs, Chief Risk Officers, Risk Managers and heads of international divisions is in effectively managing their risk exposure.
Contrary to what some believe, there is no one numerical value whether a country rating or ranking that one can ascribe to country’s risk exposure which would then form the basis for making an informed business decision.
In actuality, effective risk and CSR assessment and the management thereof must rely on a structured approach and methodology that draws upon deep and extensive experience and knowledge of local norms and mores coupled with an equally strong understanding of the industry and company concerned. Only then will a highly tailored and meaningful risk assessment emerge upon which informed decisions can be made enabling a company to identify and mitigate risks, strengthen sustainability practices and potentially uncover opportunities.
Sustainability and enterprise risk management should be an ongoing exercise for global businesses as conditions often change necessitating a business to re-examine past assumptions. Often, event triggers can be incorporated in this process or framework for effective monitoring.
Devconia’s extensive experience in developed and more so emerging countries makes us uniquely suited to help multinational companies navigate the cultural terrain and engage local stakeholders in a way that develops strong and lasting relationships. We leverage our effective, economic, social and environmental risk strategies augmented by our deep cultural understanding embedded in a holistic corporate social responsibility framework. This approach will strengthen local, cultural and linguistic understanding critical in helping clients manage and mitigate risks while supporting their sustainability efforts.
How We Tackle CSR, Sustainability, Political & Cultural Risk
- Assist in community development needs in areas of operation and leverage our convening power to bridge the cultural gap between corporations and local people
- Assess and strengthen Corporate Social Responsibility (CSR) through needs assessment, strategy formulation, Implementation and reporting
- Leverage quantitative and qualitative risk assessment tools
- Mitigate impact of potential adverse events through risk identification and mapping including environmental impact
- Facilitate community development and engagement
- Define and identify important event triggers, the occurrence of which would have an adverse impact on an enterprise and the corresponding actions that would go into effect to mitigate such risks
- Employ specialized and tailored political and cultural risk analyses that strengthens an enterprise’s predictive capabilities to better respond to legal, political, economic and social shifts
- Monitor, evaluate and improve
Benefits to Clients
- Builds and strengthens existing sustainability practices
- Ensure a good corporate citizen in local communities and build goodwill among local inhabitants
- Increased enterprise resiliency to external threats both political and cultural
- Structured approach to identify and evaluate political and cultural risks and the ability to monitor and manage such risks
- Increased capability to identify and capitalize on global opportunities
- Better understanding of how changes in the political, social and cultural landscape can affect overall risk exposures and business performance
- Access to insightful analysis of local politics and customs likely to impact a company’s decision to enter, expand or exit a given market
- Improvement in a company’s overall sustainability and risk management policies and procedures
- Increased overall cultural IQ in territories in which businesses operate
Our Project Activities
- Leverage our comprehensive sustainability, political and cultural risk methodology to identify opportunities while uncovering potential pitfalls
- Conduct risk assessment gap analyses for contingency planning
- Build, develop and complement culturally sensitive sustainability policies and procedures
- A comprehensive sustainability report and risk assessment framework of existing and potential risk exposures.
- Recommendations of practical steps that should be undertaken to minimize and address risk factors
- An improved and tailored sustainability framework
- Strategies to develop local communities