Under the Spotlight - The Transition of Environmental Risk Management

Under the spotlight
The transition of environmental risk management
sponsored by An Economist Intelligence Unit report ACE, KPMG, SAP and Towers PerrinThe Economist Intelligence UnitThe Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For 60 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide.The Economist Intelligence Unit delivers its information in four ways: through its digital portfolio, where the latest analysis is updated daily; through printed subscription products ranging from newsletters to annual reference works; through research reports; and by organising seminars and presentations. The firm is a member of The Economist Group.
About this researchThe Economist Intelligence Unit surveyed 320 executives around the world in March 2008 about their attitudes to environmental risk management. The survey was sponsored by ACE, KPMG, SAP and Towers Perrin.Respondents represent a wide range of industries and regions, with roughly one-third each from Asia and Australasia, North America and Western Europe.Approximately 50% of respondents represent businesses with annual revenue of more than US$500m. All respondents have influence over, or responsibility for, strategic decisions on risk management at their companies.The Economist Intelligence Unit's editorial team conducted the survey and wrote the paper. The findings expressed in this summary do not necessarily reflect the views of the sponsors. Our thanks are due to the survey respondents for their time and insight.
Copyright© 2008 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited.All information in this report is verified to the best of the author's and the publisher's ability. However, the Economist Intelligence Unit does not accept responsibility for any loss arising from reliance on it.Under the spotlightThe transition of environmental risk management
Executive Summary
here is a growing consensus that business increased complexity in business. A successful compa-should bear a greater responsibility towards the ny now depends on an intricate web of global supply environment and pay closer attention to the chains and partner networks, while an international T“externalities” that its activities create. Non- reach – through alliances, acquisitions and greenÞ eld governmental organisations, customers, govern- investments – has become a prerequisite for growth. ments and investors have all begun to scrutinise the Given these two parallel trends of greater business activities of business more carefully and demand complexity and scrutiny into environmental perform-a more responsible and sustainable approach. In ance, it was only a matter of time before companies response, the business community has implemented would seek a more rigorous way of identifying and corporate social responsibility programmes with assessing their environmental liabilities, and of man-the aim of improving its social and environmental aging the risks associated with them in a more coher-behaviour and portraying itself as a more responsible ent manner. Companies now seek greater visibility member of society. not just of their own activities, but of those that take External pressure to improve environmental per- place in countries to where they have outsourced formance has coincided with a trend towards manufacturing, logistics or assembly. In addition, as Key points from the survey: organisations increasingly seek overseas acquisitions to further expansion plans, there has been a growing 1) Environmental risk management is frequently managed in an ad hoc fashion. realisation of the need to scrutinise environmental performance of target companies more carefully as 2) There is no clear consensus about who should be part of their due diligence processes.responsible for environmental risk. But while the general trend is towards a more 3) Many companies conduct strategic activities rigorous evaluation of environmental risk, this is by without a formal assessment of environmental risk.... [download for more]