Sustainability is the new economic paradigm that will be leading us in the years ahead and companies not complying in this sense in the medium and long term might be marginalized in the market.

The changes imposed by pandemic, and the sudden reduction of both industrial activites and travelling have greatly impacted the environment.

The highest decrease in CO2 emissions in history has been recorded during lockdown. Altough changes in such a limited period impact minimally, we have had the chance to better understand what a green future might look like, and to become more aware of how crucial it is to change our behaviour to reach zero emissions objective within 2050.

Such change will have to be cultural, and will affect all size companies both in the environmental and social sphere, as well as governance.

This means a sort of commercial imperative for companies, prompting us to switch to sustainable production in each sense according to ESG: Environmental, that is fighting against pollution and optimizing environmental resources; Social, that is society-related issues more in general, from gender policies, human rights and labour standards; Governance, i.e. appropriate behaviour of both government and companies as referred to law compliance and deontology.

Find out more about RSM Sustainability Services

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Debate on “Risk In Focus 2021 – Hot topics for internal auditors”

In spite of urgency and severity of climate change-related risks being recognized by corporate managers, the survey considered, “Risk In Focus 2021 – Hot topics for internal auditors”, resulting from the cooperation of Institutes of 10 European nations (Austria, Belgium, France, Germany, Italy, Luxembourg, Netherlands, Spain, Sweden, UK and Ireland), sponsored by ECIIA (European Confederation of Institutes of Internal Auditors) and which describes on a yearly base a map of the main risks companies will have to face considering future audit plans, clearly shows that:

  • Only 6% of audit chiefs claim that climate change and sustainability represent on of the first risk areas to invest on;
  • Only 23% of audit chiefs instead claim that they will be a priority within three year’s time.

In such context, where risks cannot be ignored, without proper training we will not be capable of facing the consequences of climate change, just like we haven’t been so far vis a vis pandemic.

 

The role of Risk management, Legal & Compliance and Internal Audit

The key role of control activities in corporate strategies in sustainable development area of companies may become crucial in this phase for supporting boards to understand how to develop:

  • A business strategy where ESG principles and corporate objectives are integrated;
  • The ability to provide a vision of sustainability-related processes;
  • Actions required to fill gaps in the current strategy.

Business evolution to a ESG sphere requires acting on corporate organization, revisiting contracts and finding new risks and new measurement models. In such context Internal Audit may play an important role so as to guarantee an internal control system consistent with the new reality.

In order for these needs to be met, RSM has created Sustainibility Service integrated with other RSM services which can support companies throughout their sustainable growth following three directions: Business, Compliance and Accountability.