Launching Today: New Draft Guidance for Applying Enterprise Risk Management to Environmental, Social and Governance-related Risks

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Launching Today: New Draft Guidance for Applying Enterprise Risk Management to Environmental, Social and Governance-related Risks

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Check out the first-ever guide for applying enterprise #riskmanagement to #ESG-related risk http://bit.ly/2sfTjRX Draft now open for comment until June30. #GreenBiz18 @wbcsd
Wednesday, February 7, 2018 - 9:05am

PHOENIX and LAKE MARY, Fla. February 7, 2018 /3BL Media/ – Today at GreenBiz 2018, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and the World Business Council for Sustainable Development (WBCSD) released draft Guidance for applying Enterprise Risk Management (ERM) to Environmental, Social and Governance (ESG)-related risks.  

The existing COSO framework, Enterprise Risk Management — Integrating with Strategy and Performance, is one of the most widely recognized and applied risk management frameworks in the world. Its goal is to help organizations create, preserve, sustain and realize value while improving their approach to managing risk.

The supplemental draft Guidance released today is designed to help organizations worldwide respond to the increasing prevalence and severity of ESG-related risks, ranging from extreme weather events to product safety recalls.

"When companies have a better grasp on their risks, they can make better business decisions. With this work, we’re going to help drive positive change in corporate governance,” said Peter Bakker, President and CEO at WBCSD. “Better regulation will take time, but the work we’re doing with COSO that embraces the COSO risk management framework is something that can have a massive impact."

Highlights of the draft Guidance include:

  • Methods to overcome ESG-related risk challenges, including identifying and assessing the severity of risks with uncertain financial consequences
  • Innovative responses for addressing ESG-related risks and seizing opportunities

“As ESG-related risks are becoming more widespread, organizations need to ensure they have processes in place for identifying, assessing and managing these complex entity-level risks and opportunities. We believe ERM is the most powerful way to achieve this,” said new COSO Chairman Paul Sobel. “As with any group of risks, integrating ESG-related risks into ERM enables organizations to realize long-term value.”

The draft Executive Summary and Guidance can be viewed at www.COSO.org. COSO and WBCSD will be seeking public comment on both through 30 June 2018 to ensure that the business and regulatory community are represented in the final version. Further details will be available on the COSO website.

This project is funded by the Gordon and Betty Moore Foundation.

About COSO
Originally formed in 1985, COSO is a voluntary private sector organization dedicated to improving organizational performance and governance through effective internal control, enterprise risk management and fraud deterrence. COSO is jointly sponsored by the American Accounting Association (AAA), the American Institute of Certified Public Accountants (AICPA), Financial Executives International (FEI), the Institute of Management Accountants (IMA), and the Institute of Internal Auditors (IIA). For more information, visit www.COSO.org.

About WBSCD
The World Business Council for Sustainable Development (WBCSD) is a global, CEO-led organization of more than 200 leading businesses working together to accelerate the transition to a sustainable world. WBCSD helps make its member companies more successful and sustainable by focusing on the maximum positive impact for shareholders, the environment and societies. WBCSD member companies come from all business sectors and all major economies, representing combined revenue of more than $8.5 trillion and 19 million employees.

This project is funded by the Gordon and Betty Moore Foundation. The Gordon and Betty Moore Foundation fosters path-breaking scientific discovery, environmental conservation, patient care improvements and preservation of the special character of the San Francisco Bay Area. Visit Moore.org or follow @MooreFound.

Media contacts:

Felicity Glennie-Holmes
Director, WBCSD Communication
Glennie-holmes@wbcsd.org

John Babinchak
The Institute of Internal Auditors
john.babinchak@TheIIA.org
(407) 937-1240

Keywords: Research, Reports & Publications | CSR Reports | Committee of Sponsoring Organizations of the Treadway Commission (COSO) | Corporate Social Responsibility | Enterprise Risk Management | Environment | Gordon and Betty Moore Foundation | Governance | Shared Value | Sustainability | Transparency