How to incorporate ESG risks within risk workshops

3 min read
Jan 5, 2022

Here we present the advice members have shared and the approaches they have benchmarked with one another to help run more effective risk workshops that also bring ESG risks into the conversation.

Download now [Member Meeting Summary]: What is the role of ERM in ESG?

Are they the responsibility of the sustainability team? Or HR? Or the strategy, or risk team?

Environmental, social and governance (ESG) issues are fast becoming a top corporate agenda item. Unfortunately, they are often either monopolised by one particular department or pushed around by several that do not want to commit to taking responsibility for them.

This often leaves ESG matters siloed from decision-making conversations.

Encouraging your organisation to discuss these issues and identify the related threats and opportunities can be challenging, especially when there are varying degrees of understanding around ESG matters within a company, as well as a lack of forum to discuss such matters.

Last year members discussed how to run better risk identification workshops. That conversation has since developed further, looking at ways to take risk workshops as an opportunity to get ESG more embedded within the corporate agenda and within employee conversations and risk assessments.

Risk management can be the catalyst for removing ESG concerns from their often siloed position within a company and into more of an integrated position. Risk workshops can be the forum to do this.

Through member meetings and bespoke networking assistance opportunities, global risk leaders – our members – have benchmarked their approaches to identifying, assessing, and mitigating ESG risks which have been captured in our better practice guidance: a pool of knowledge shaped by the concerns and challenges members want solutions to.

One particular aspect explored in detail within this better practice guidance (available to members on our Intelligence platform) is how practising risk leaders are enhancing their risk workshops to incorporate ESG risks in subtle, but effective, ways.

Keen to improve your own risk workshops and increase stakeholder interest and understanding of ESG risks? Here is a summary of just some of the tried-and-tested ways that members have shared with the network:

1) Use your risk champion network for maximum impact

Your risk champions are the conduit to engaging the business in risk conversations and ensuring risk management cascades down across the wider business. If they are not comfortable and confident with risk management or the purpose of risk workshops, it’s likely no one will be.

Some members like to run introductory workshops ahead of actual risk workshops, where the risk team discuss the purpose and design of the upcoming workshop, and provide some risk skill-building content and education about the role of the risk champion. This can also be the time to test the waters: how much understanding is there around ESG issues and risks? Do you need to provide certain pre-reading materials ahead of workshops to ensure everyone is on a level playing field?

The introductory sessions also provide opportunity to get feedback on risk champion expectations for their role, as risk champions, and also on the upcoming workshop – risk champions’ honest feedback enables you to tailor your workshop format accordingly; you can consider it a dry run of the real thing and even use it as an opportunity to consult the risk champions to tailor workshops for their business area.

2) Don’t forget to set the scene

Before you even get to the workshop stage, it can be a good idea to first secure support and buy-in from line managers. Set the tone for these risk workshops to be about discussion and exploration. If line managers from each major business area are on board and are the ones encouraging their teams to partake, you’re more likely to get people with different viewpoints but a shared willingness to participate.

Ideally, you want the drive to participate to come from the business itself, rather than the risk team seemingly forcing anyone to take part.

What is the rationale for holding your risk workshop? And do participants understand this in advance? Members agree that reinforcing messaging months before a risk workshop takes place builds momentum and gains you broad support.

3) Include ESG as a consequence category of risk assessment criteria

Rather than run separate ESG risk workshops, several members prefer to incorporate ESG risk conversations into other risk identification sessions. This reinforces the idea that ESG should not be siloed off from the rest of the company or its risk register.

Some companies have ESG included as a consequence category in their risk assessment process. Others take this further and align their risk appetite statements to their risk assessment’s consequence categories.

All this brings ESG to the risk management conversation. Within the workshop setting it means that, every time a risk is identified and assessed, the impact to the company’s ESG strategy – and the ESG impact of a risk – is considered and discussed.

Integrating ESG conversations into workshops in these ways is proving successful for members who note that ESG is now no longer just about stakeholder expectations, but actual meaningful conversations that people from all levels of the business are engaged in.

For access to our better guidance on ESG risks and opportunities – which includes detailed content on how to run scenario-based risk assessments; how to integrate climate risk into an existing ERM framework; and how to build sustainability into enterprise risk management decision-making – contact us about membership today.

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