Creating Pathways to Corporate Sustainability: A Unified Risk Management Systems Approach

1. Creating Pathways to CorporateSustainability: A Unified Risk & Management Systems Approach John Grosskopf, P.E., BCEEERE, Inc. John Milliman, PhDUniversity of Colorado at Colorado Springsjwgrosskopf@cox.netjmillima@uccs.edu

2. Outline • Today’s Business Challenges • Strategic Corporate Social Responsibility (CSR) - Porter & Kramer • Unified Risk Management Systems & Partnering - a Pathway to Sustainability • Implications for Research and Practice

3. Public Concerns Expansion Needs Today’s Business Challenges Increased Transparency Resource Scarcity Climate Change Global Competition • Environmental laws/regulations • Employee retention • NGO demands • Aging facilities • Resource inefficiency • Business continuity Sustainable Business Enterprise

4. Strategic Corporate Social Responsibility(CSR) - Porter & Kramer* • The authors assert most CSR efforts are:- unproductive and disconnected from business strategy • They suggest a strategic CSR framework that identifies positive/negative business impacts on society, and how to prioritize and address them • Looking “Inside-Out” and Outside-In” • A very useful framework but one that does not address implementation, and… • A handful of business leaders already have frameworks that manage all their risks/impacts as well as opportunities: the Unified Risk Management approach * The Link Between Competitive Advantage and CSR, HBR, Dec. 2006

5. Unified Risk ManagementImproving Risk Identification & Management A single, cohesive and unified approach to address all organizational risks - simultaneously A new and innovative application of proven quality management methods, tools and cross-functional approaches S Q E H&S

6. Unified Risk MethodologiesExamining Social Risks • Unified risk methods assess ALL issues/threats and opportunities: - Looking inside-out: assess impacts of the organization on society - Looking outside-in: assess societal impacts on and linkages with the organization • Unified risk management helps determine the nature, the magnitude, and the priority of all risks and opportunities; both inside and outside the business (shared risks) simultaneously

7. Partnering for SuccessImproving Inside-Outside Linkages • Partnering is a practical approach that:- improves linkages between business & society- improves stakeholder trust- helps determine and exploit shared value • Partnering is an important leveraging tool that counters the effects of downsizing and resource limitationsTogether, unified risk management and partnering are practical methods to enhance CSR and are a pathway to sustainability

8. Creating Mutual ValueUnified Risk Management and Partnering Regulators Communities Public Pressures Cooperative Exchanges & NGO’s & the Public A Firm’s Unified Risk Management System Collaboration Knowledge Sharing Academia Suppliers & Contractors

9. Implications for Practice and Research • A handful of business leaders and exploratory research provides evidence unified risk management approaches are effective • Empirical research is needed to:(1) Map the opportunity aspects of the unified risk approach in a CSR framework (2) Assess the impact of the unified risk management approach on lowering costs, mapping of organizational opportunities, and improved regulatory compliance