The art of managing risk

Much can be said about the time we are living in right now, but one thing is certain: it’s eventful and it bubbles everywhere. We’ve met several companies this week with products that are required for the transition to a fossil-free world (trains and charging boxes for electric cars for instance), but also companies that are trying to find their place in the new order where sustainability requirements are coming in from all directions.

It’s not easy to run a business these days. Let’s just take a look at Google. In their sustainability report from 2019, they state: “The path to a cleaner, healthier future begins with the small decisions we make each day. That’s why we strive to build sustainability into everything we do”. With that said, where does their responsibility start and where does it end?

Following a report from Greenpeace, criticizing Google for supporting the oil and gas industry, they now say that they will stop helping the oil and gas industry find and extract oil using artificial intelligence. Being associated with the oil and gas industry simply fits badly with their high morals.

Is it good or bad, right or wrong? Is it reasonable for the fossil industry not to have access to the latest technology while we still depend heavily on their products? The majority of cars on our streets are still fossil fueled, we fly when we can and use oil in everything from plastic bags to cosmetics.

It’s all about managing risk. When the large Swedish fund, Första AP-fonden, announced that they are clearing their portfolio of fossil fuel companies, it’s all about risk. When the world changes to curb climate change, the risk of investing in fossil fuel companies becomes too high, both financially and from a brand perspective.

Where does the responsibility start and end for a business? It’s certainly exciting to start thinking about it. You are responsible for your own production and business of course, and reasonably your choice of suppliers, but are you also responsible for your customers, just as Google decided to be in the AI case?

A good start is to understand your sustainability risks from all perspectives and understand how to mitigate them.

We are happy to help you out!