Sustainability Risk from the Lens of an Insurance Provider!

The top five identified risks included:

• Extreme weather and natural disasters that severely affect crops and populations in vulnerable regions
• Lack of fresh water access that threatens health and food systems, while imposing social impact constraints
• Unsustainable urbanization as people migrate to larger cities generating additional congestion, health, and economic prosperity issues
• Non-communicable diseases such as heart disease, chronic lung disease, diabetes, and cancer that cause significant threats to individual livelihoods while restraining community development
• Dependency on fossil fuels where reliability on petroleum based fuel sources can inhibit further reduction of GHG emissions and the use of alternative energy technologies.

Using this report and risk information concerning the environment as background, how then does the compliance and insurance community view their responsibilities for ensuring that companies and organizations meet compliance, risk, and insurance requirements? Ethical Corporation conducted a benchmarking study of compliance and risk among over 250 executives who work in the compliance and insurance industry in the US and Europe. A few interesting statistics showed that nearly 85% of the respondents indicated that putting customers first was their number one business priority for this year. At the same time, over 55% of the participants indicated that the role of the compliance officer was changing. Furthermore, over 85% of the professionals interviewed felt that creating a risk and compliance culture that satisfies regulatory requirements is tantamount to success and preventing environmental risks and issues from occurring. So what then are the highest priorities for businesses to address both risk and opportunities?

The key strategies are:

-Staying ahead of regulatory change and requirements. Being reactive or just meeting regulatory compliance is not enough for marketplace competitiveness. Leadership requires raising the bar on your own through continuous improvement that will set your company and industry apart from others. A good example is the Sustainable Packaging Coalition ( that provides design guidelines, metrics, and reporting for sustainable packaging initiatives.

-Ensuring that your organization establishes a culture of compliance and reaches out to shareholders and stakeholders. This strategy tells the good news where recognition can easily be given, as well as the lessons learned and takeaways when an incident or sub-standard performance has taken place. It is important to make compliance and performance a priority and requirement for good corporate conduct and decision making. A whitepaper on a government, compliance, and risk management framework is available at

-Developing effective compliance programs does not mean that just having a compliance program is satisfactory or good enough. It is not about the compliance process itself that is critical and important, but more about the effectiveness and the results of the compliance program. This strategy may require developing collaborations and partnerships with service providers and customers, as well as employees. Steps to building an effective compliance program for your organization can be accessed at

In order to achieve the desired results, the Insurance Culture Benchmarking Study goes on to report the critical compliance area priorities including: resource spending, changing organizational models, improving technology development, supporting “front line” management, conducting more in-depth and effective risk programs, and ensuring customer care.

Potential sustainability risks can be seen on the horizon in many areas from the threat of weather and natural disasters, to the access of natural resources and materials, as well as health and wellness, and urbanization issues. The question for business is how to address these concerns moving forward?

As the studies indicate, compliance and risk management is undergoing change, from organizational structure, to function and job responsibility, as well as to the creation of new and more effective compliance programs focused on the customer. To be an effective compliance leader often requires raising the bar internally first, setting new course changes and directions for your business, and monitoring results and performance along the way with new metrics. Cost savings can be achieved and potential risks avoided, and with improved performance your insurance premiums might even be lowered!

I wish you the best on your sustainability journey!
Norman Christopher
Director, Office of Sustainability Practices Grand Valley State University
Author, Sustainability Demystified

(1) GlobalOpportunityReport, (2) InsuranceCultureBenchmarkingReport2015,EthicalCorporation