Page 87 - IRMSA Risk Report 2021

5.3 IMPORTANCE OF RISK
MANAGEMENT’S ROLE IN INTEGRATED
REPORTING

Creating synergy between risk management and integrating reporting

Whether it is environmental, social and governance (ESG) reporting or reporting
against the six capitals, increasingly corporates are committing to the reimagination
of value beyond just financial indicators. There is a broader understanding that
improving risk related disclosure, which includes ESG risks, will assist all stakeholders
to make informed decisions about any organisation. It goes beyond financial
capital to recognize two further elements: first, the shared value an organization
creates which benefits its direct stakeholders; and second, the value it generates
for society and the environment. Using all three value elements to guide reporting
and disclosure holds significant potential upside for companies, enabling a better
understanding of their risks and potential returns that can be generated through
new opportunities. The purpose statement of companies has become more clearly
defined through this process. Shared valued and stakeholder responsibility is a
major part of risk management for all companies.

Regulatory measures and non-governmental initiatives are speeding up this
evolution across the globe with the Johannesburg Stock Exchange (JSE) not far
behind. The JSE became the first South African stock exchange to list two global
ESG focused Exchange Traded Funds.

The significant role that risk professionals play in any organisation should include
collaboration with their integrated reporting counterparts as there are synergistic
benefits in terms of value that can be unlocked not just in compliance with the
integrated reporting framework but similarities to be leveraged in integrated
thinking, decision-making and actions that focus on the creation of value over
the short, medium and long term. It goes further by focussing on strategy, future
orientation and the importance of integrated thinking within the organisation.

Sources: RiskInsights; EY, Integrated reporting - Linking strategy, purpose and value

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