This week in Dubai at the Institute of Internal Auditors (IIA) International Conference, over 3,000 risk management and audit professionals gathered to discuss how technology and a shifting risk landscape will change the way that they manage risk and compliance across their companies.
For the Redefining Value program at the World Business Council for Sustainable Development (WBCSD), attending the IIA International Conference was a key step in taking sustainability issues that improve decision-making to a mainstream audience.
This conference is “the premier training and networking event for internal audit professionals" and risk managers worldwide. And this year attracted the largest number of attendees in over 50 years with the theme “Connecting the world through innovation.”
One key element of this was on the increasing prevalence of sustainability risks. Unfortunately, with the myriad of issues companies face every day, sustainability (i.e. environmental, social, governance [ESG]-related) risks often fail to gain the attention they need.
Across the event, WBCSD aimed to provide support and guidance to companies struggling to incorporate ESG-related risks into the risk management or internal audit functions and activities.
On Monday 7 May, WBCSD and COSO (The Committee of Sponsoring Organisations of the Treadway Commission) held a session on Integrating Environmental, Social and Governance-related Risks into Enterprise Risk Management.
Over 150 risk and compliance professionals attended. The goal was to engage the risk and internal audit profession in ESG issues that companies face globally. Presenters emphasized the importance of looking at a wider portfolio of risks while managing and mitigating them.
A powerful video presented the uncomfortable fact that “you never know, what will come tomorrow.”
The session then went on to explain that, in a first-of-its-kind partnership, WBCSD and COSO worked together to develop a cutting-edge guidance for applying Enterprise Risk Management (ERM) to ESG-related risks that covers everything from extreme weather events to product safety recalls.
Because the preliminary draft is open for public consultation until 30 June, session attendees were encouraged to explore the guidance and give their feedback from now until then.
“When businesses, investors and other organizations fully understand their risks, they have the power to make better decisions. Having all the information will help improve risk management profiles,” said Rodney Irwin in a piece released in tandem with the conference. Irwin is the Managing Director of WBCSD’s Redefining Value Program.
As an event exhibitor, WBCSD also provided an opportunity for delegates to engage with the new application guidance through an interactive game, as well as opportunities to speak with members of the Redefining Value team about the potential issues their companies may face.
At the exhibit, visitors from over 35 countries engaged with WBCSD on ESG-related risk management.
On Tuesday 8 May, the new Chairman of the COSO Board (Paul Sobel) presented at a session on Enterprise Risk Management, showcasing the new updated ERM Framework – Integrating strategy and performance released in September 2017. During this session Mr. Sobel talked about the importance of sustainability issues and that ESG-related risks apply to any organization.
He discussed the changing risk landscape and outlined that partnering with experts like WBCSD to help address new risks will be important for the future across many different areas of business.
According to Brendan LeBlanc, a Partner at EY presenting on behalf of COSO said, "COSO's updated ERM framework highlights the importance of integrating strategy into ERM activities. Companies who do this well, will have an effective avenue for incorporating the ESG-risks and opportunities that may impact the long-term profitability or survival of the company into strategic decision making."
In closing, “Over 800 risk and audit professionals have engaged with WBCSD’s Redefining Value Program for the first time this week,” said Irwin. “Our vision of making more sustainable businesses more successful resonated with many and our focus on better decision making and disclosure spoke their language, and our partnership with COSO has allowed us to connect the ESG agenda with this mainstream audience and will advance our work going forward.”
WBCSD will continue engagement with mainstream risk management and internal audit professionals as we work to shift the system to reward the world’s most sustainable companies. Stay tuned for more updates.