Now that the new year is off and running, GRC professionals are busy looking ahead to the new challenges we’ll inevitably face and the opportunities we’ll hopefully find, while also feeling the need to reflect upon key learnings from the previous year.
While some may see the new year as simply a continuation of the same challenges from the previous year, others recognise the trends and issues that will put greater pressure on their ability to continue identifying, addressing, and responding to the evolving risks that can threaten their organisation’s success.
We respect and appreciate all GRC professionals who strive to be the go-to executive advisors, with the information, recommendations and risk-mitigation strategies to survive and prosper under social, business, and economic conditions that are unlike any others known in this generation.
Three core areas in the risk landscape continue to quickly evolve, and are already challenging many organisations, and the GRC community collectively, to bring focus and resources to address these growing issues. Easier said than done given our existing responsibilities to maintain and enhance everything we were already doing in 2021 to address risk and ensure compliance for our organisations.
While risk management doesn’t have a start and endpoint, and demands ongoing vigilance, our goal for 2022 (as it was in 2021?) is to better integrate our various efforts and activities into an enterprise GRC programme that is effective, efficient, and holistic.
Addressing the ESG Revolution
The ideal of putting people and the planet at the heart of business is no longer theoretical. Environmental, Social and Governance (ESG) may represent the most transformative set of risk management issues facing organisations in 2022. ESG has climbed rapidly to the top of the corporate agenda due to increased investor pressure, consumer demand, regulatory action and activist shareholders with nearly every organisation scrambling to respond. In such a dynamic landscape, keeping up with the latest developments is vital for any organisation seeking to take a leadership role and avoid the reputational impact and economic fallout of falling behind on these issues.
ESG is multi-faceted, complex, and covers a panoply of evolving risks — from carbon footprints, to labour practices and corruption, to employee diversity and inclusion. Risks and impacts are changing rapidly, and it seems everything relating to environmental performance, social justice and governance can be high-profile with transgressions often very public. The potential impacts of poor ESG practices should not be downplayed or dismissed.
Today, ESG reporting, ratings and scores are increasingly used to assess a business’s viability as a supplier, partner, or investment. A review conducted by Oxford University and Arabesque of over 200 sources on ESG performance showed that ESG portfolios continually outperformed traditional portfolios. An overwhelming majority (88%) of organisations that were focused on sustainability saw their operational performances improving, translating to higher cash flows.
Adopting a structured approach to risk management, and managing your programme on an effective GRC platform, can make all the difference in your ability to successfully embrace the challenges of ESG. A comprehensive GRC software solution that supports a full ESG spectrum enables GRC professionals to gather, consolidate, and manage all of the information necessary to evaluate, address and track an organisation’s growing array of ESG risks and initiatives. In addition, an effective GRC platform can make all the difference in your ability to deliver an ESG programme that is embraced by employees and valued by executives and the board. With an effective programme delivering a holistic view of ESG, your organisation is better able to embark on the path toward a more ethical and sustainable model that satisfies stakeholders and regulators, and attracts investors and customers.
The Pandemic in 2022
Both 2020 and 2021 have been an experimental trial for businesses as they were required to respond to the complications, risks and intricacies of the pandemic and its impact on its people, customers, business strategy, operations and objectives.
A recent Forbes article noted that the biggest risks that businesses will continue to face going into 2022 are pandemic related. Whether it’s government policies or regulations, things continue to rapidly change as COVID-19 cases keep fluctuating, making it difficult for many businesses and companies to react, and even stay afloat.
Investing in a strong risk, resilience and compliance programme can improve the sustainability, productivity and profitability of any business, while advancing employee understanding, and enabling corporate and environmental responsibility. All of which will help organisations successfully manage whatever 2022 will throw at us.
Cyber Security & Data Privacy
Last year cyber risks and impacts reached new heights with the highest average cost of a data breach being recorded in almost two decades and numerous high-profile incidents dominating headlines. The real-world impact of many of these incidents, for example the inability of hospitals in Ireland to admit patients, or the fuel shortage crisis in the United States following the shutdown of a critical pipeline due to ransomware attacks, thrust cyber security into the general public’s consciousness once again.
Organizations are undeniably more vulnerable to attacks from threat actors due to factors like the shift to hybrid working models, increased digital transformation, and the ever-growing reliance on global supply chains.
On a positive note, there are clear signs in the public and private sector that organisations are responding to the threat of cybercrime by implementing frameworks for resilience and security. Whether you are navigating the creation of a hybrid workplace or introducing new customer technologies, cybersecurity will be continue to be a growing critical issue in 2022.
As with other key risks, a stringent approach to tackling cyber security and data privacy is essential. Cyber security and data compliance need to be consistent, meticulous and integrated. The range of laws to be complied with, and the growth in rigour around data protection, make this an area where siloed strategies or check-the-box approaches can no longer keep pace with the demands.
Risk or Reality?
The pandemic has certainly refocused the risk lens and has made business leaders acutely aware of new and existing risks that can impact an organisation’s viability.
In a world where new threats come from unexpected directions, aligning risk to business objectives and strategic goals is fundamental to ensuring executives and their boards are better prepared and more empowered to make decisions in the face of evolving risks. With a consolidated and holistic programme for governance, risk and compliance, organisations are better able to achieve a comprehensive approach, create a risk-aware culture, and ensure long-term viability.
Camms works with a growing array of enterprise clients, and their trusted advisors, to build comprehensive GRC programmes on our world-class GRC platform for all types of organisations throughout the world.
Ask your trusted advisor about Camms, and to discover more, request a demo of Camms.Risk software today