Risk Management in the Green Economy

Most companies have some sort of risk management system. Risk management is the process of looking for potential risk to profits, and then trying to neutralize those risks. A Green Economy is a system where fossil fuel use is reduced and the goal is to create a more sustainable use of goods that can benefit as many people as possible. This means that risk management in a Green Economy tries to eliminate risks to profits as well as risks to the environment as a result of doing business.

Risk Management Can Result In Fewer Ecological Disasters
BP was criticized in the way it handled the oil spill last summer. It has been suggested that a better risk management plan could have been the answer. Even if the spill couldn’t have been prevented, a better plan would have reduced the risk for a disaster on such a grand scale.

Risk Management Can Lead To Less Dependence On Fossil Fuels
A company that runs a coal powered power plant, or releases carbon dioxide into the air can cause pollution, and many health problems for the community. Risk management planning would call for an elimination of as much pollution as possible, with a system of solar or other renewable energy sources used more widely.

Sustainability Is A Major Concern
One of the risks that is looked at is sustainability. In other words, how do the actions of the company impact the ecosystem, or how does it help the ecology sustain itself. This means that farming techniques, building designs and recycling programs would be designed specifically to make sure that resources are being used to their full potential.

How Does It Help People
One of the other big goals of a Green Economy is that it needs to help raise the standard of living of the people that the company employs and/or impacts. This means a risk management team is going to want to understand how building a factory could disrupt animal migrations. This could have an impact on hunting or fishing for the natives in the area. A good risk management objective would be to make sure that a factory built in town would provide jobs, but not otherwise disrupt a way of life.

Can You Stay Local
Cutting down on traveling costs and miles that an item has to be shipped keeps food fresh. Keeping jobs within a community keeps the locals employed and supports other small businesses in the area. It is believed in a greener economy that you should put a premium on what the community can do as opposed to mass producing goods cheaply in a foreign factory. Therefore, a good risk management team can find a way to integrate a sense of community and family to boost morale and public image of the brand.

What role does risk management play in a Green Economy? It has to find a way to produce a sustainable product that will help people and keep jobs in the community. The role of risk management will be to find ways that a company can build and expand while using new technologies and methods to enhance the company brand and reputation in the market.
Cole Marks consults with companies on how to establish the best loss control management system for their liability insurance.

Keep Reading and Check out these Articles:

1. How we are a Green Company
2. September Green Events in Chicago
3. Chicago Green Events March 2009
4. Green Hero of Chicago-Lisa Elkins: Redesigning Chicago's Sustainability
5. Chicago Green Community