Sustainability and Enterprise Risk Management

The challenge of environmental sustainability is important not only as a moral imperative, but also a managerial responsibility to operate profitably. Environmental sustainability has become a critical factor in business, as the threats to environmental degradation from carbon emissions, chemical pollution, and other sources has repeatedly created liability for firms that don’t consider the environment, as well as regulatory attention. Legislators and journalists provide intensive oversight to operations of any organization. There are many cases of multi-billion dollar corporations brought to or near to bankruptcy by responsibilities for things like asbestos, chemical spills, and oil spills. We discuss risk management as applied to production in the food we eat, the energy we use to live, and the manifestation of global economy, supply chains. The triple bottom line is a useful way to focus on the role of sustainability in business management. This chapter includes a review of enterprise risk categories along with common responses.