On the 18th of July TSB Global Advisors hosted another private virtual roundtable with a group of 18 independent directors, executives, and chairs. The discussion was moderated by Executive Advisor Frederik Otto. Our guest speakers were Chloe Demrovsky and Fatima Hadj who expertly summarised the nexus of risk, resilience and sustainability.
Synopsis:
1. Integrating Geopolitical Perspectives
Holistic Risk Assessment
Broaden Evaluation Criteria: Traditional risk assessments focusing solely on creditworthiness are inadequate. Incorporate geopolitical risks to capture the full spectrum of potential impacts on investments and operations.
Securing Value Chains: Ensure that business operations, whether in urban centres or rural areas, consider geopolitical and conflict. This is crucial for SMEs in emerging markets where instability can significantly affect financial stability
Adaptation Planning: Use forward-looking scenarios to plan for macro shifts and incorporate these into risk mitigation strategies
2. Addressing (Insurance) Market Challenges
Climate Risk Management
Reassess Risk Mitigation Strategies: With increasing areas becoming uninsurable due to climate risks like floods and wildfires, organisations need to reevaluate their risk management frameworks.
Scenario Planning: Develop and test adaptation plans for various climate-related scenarios to ensure preparedness and resilience. This includes assessing the long-term viability of insuring assets located in high-risk areas.
Human-Induced Risks
Broaden Risk Perspectives: Recognise that human activities, such as geopolitical conflicts, also significantly impact markets. Integrate these risks into your overall risk assessment and management strategies.
3. Enhancing Organisational Resilience
Tools and Levers for Resilience
Insurance as a Tool: While insurance is becoming harder to procure, it remains a crucial component of risk management. Organisations must work to secure adequate coverage and explore alternative risk transfer mechanisms
Robust Adaptation Measures: Implement comprehensive adaptation strategies to deal with both climate and human-induced risks. This includes having contingency plans and diversifying risk management approaches to ensure operational continuity
Strategic ESG Implementation:
Focus on Core Business Risks: Align your ESG strategy with core business risks to make it more credible and impactful. This includes setting achievable goals, delivering on promises, and grounding the strategy in business-relevant issues
Reporting and Transparency: Maintain transparency by reporting progress against set ESG targets. This helps build trust and demonstrates a commitment to sustainable and resilient business practices
Please send an email to ga@sustainability-board.org to request the link to the fireside chat recording.
You can learn more about TSB Global advisors here.