Risk Management

Enterprise risk management (ERM) is the process by which organisations identify, assess, manage, and monitor risks that could affect the achievement of their objectives.

The integration of ESG risks into ERM frameworks has become a governance imperative, driven by regulatory requirements, investor expectations, and the material financial impacts of sustainability-related risks. Climate-related risks (physical and transition), nature-related risks, human rights risks, and technology risks are increasingly recognised as enterprise-level risks requiring board oversight. The COSO ERM Framework and ISO 31000 provide widely used frameworks. TCFD/ISSB require disclosure of how climate risks are integrated into overall risk management. ESRS 2 IRO-1 requires disclosure of the process to identify and assess material sustainability-related impacts, risks, and opportunities.

Further Reading

• G20/OECD Principles of Corporate Governance
• ESRS

Key Resources

• COSO Enterprise Risk Management Framework
• ISO 31000 Risk Management

Related Topics

• Board Responsibilities
• Disclosure & Transparency
• Sustainability & Resilience