The respected GRC guru Michael Rasmussen of GRC 20/20 posted a powerful blog earlier this year.
He challenged risk managers and advisors to pay far more attention to the dangers of climate and environmental risk. And of course then Covid-19 was still some far away problem that did not concern the western world!
Mark Carney has stated that some financial services organisations will be bankrupted through climate risk failures. And now we know, from the World Economic Forum, that Covid19 will exact a terrible commercial, as well as personal, toll.
To this we might also add: Listen up to Greta Thunberg’s message!
Whilst acknowledging that here in the UK both the FCA and PRA now require banks and insurers to have a SMF dedicated to managing the above, Rasmussen is disappointed that these issues were not on the radar of respected analysts like Gartner and Forrester. Their focus today is foremost on IT/data risks, reflected in these topics coming high (2nd and 4th) in the latest top 10 ranking of boardroom topics (Harvey Nash/LBS Board Report 2020).
Very worryingly the same report finds that 40% of boards spent zero hours (yes, you read that right!) discussing climate risk. And pandemics? Probably over 95% of boards…
(Admittedly the former figure is an improvement from the 55% figure in 2018).
Female board members interestingly paid significantly more attention to this than their male counterparts. Hmm...
A true enterprise view of risk surely has to include the impact of health (pandemics) and safety issues alongside environmental damage and climate risk.
Charles Dickens’ A Tale of Two Cities (1859) perfectly encapsulates in its opening lines the dilemmas society faces today.
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair - we had everything before us, we had nothing before us....
The advanced (so we believe) world and the social structures we have erected are now at a crossroad which can lead to very different global outcomes. We as individuals can make and take decisions which can impact our future. This is crucial but...
Organisations likewise have the same responsibilities. Will their risk policies, frameworks and management functions meet these and will they hold themselves accountable to society and future generations?
Covid-19 has posed some cruel questions…
Peter Neville Lewis - Risk Coalition