In a world where risks constantly evolve, effectively managing risks is not just a prudent strategy but a fundamental requirement for businesses’ survival. The insights shared during the session “Managing ESG Risks to Capture Growth Opportunities,” hosted by Thailand Management Association (TMA), shed light on business-related risks and how they impact businesses and industries at large. According to the World Economic Forum, climate-related issues contribute to 4 out of the top 5 global risks, encompassing economic uncertainties and supply chain disruptions that affect every industry. As such, the question emerges: How can businesses adeptly navigate these shifting risks while simultaneously seizing the opportunities for growth?
EMBRACING RISKS FOR RESILIENCE
To effectively address these risks, it is essential to recognize the constant presence of risks in our day-to-day operations, particularly in the energy sector, which is highly vulnerable to climate change. Acknowledging the urgent need to embrace the risk associated with transitioning to alternative energy sources like solar and wind power, despite requiring substantial changes, is crucial not only for the sector's survival but also for its long-term success, especially in response to evolving societal norms and changing regulations. An example of this commitment to resilience is the energy sector's incorporation of innovative solutions like Carbon Capture, Utilization, and Storage (CCUS), which play a pivotal role in reducing greenhouse gas emissions and demonstrate its dedication to proactively address climate-related challenges and foster opportunities for growth. Similarly, in the agricultural industry, where climate change disrupts productivity and price stability, tailoring operations to maximize benefits, with a particular focus on areas like water and waste management, ensures year-round operations and preparedness for the future.
ECOSYSTEM THINKING: BALANCING INVESTMENT FOR PEOPLE, PLANET, AND PROFIT
As businesses grapple with the challenge of maintaining consistent investments in innovations and infrastructure for growth while also prioritizing the well-being of both People and the Planet, a critical question arises: How can they effectively adapt to these evolving expectations? The solution to this lies in a transformative shift in decision-making, one that takes into account the 3Ps—People, Planet, and Profits—thus turning the decision-making process into a vibrant marketplace full of enticing opportunities. Instead of developing products in isolation, a business actively engages with a network of suppliers, customers, and partners to co-create sustainable solutions. For instance, they collaborate with suppliers who prioritize eco-friendly materials, reducing the environmental impact of their supply chain. They engage with customers in product development, ensuring that their offerings align with societal well-being. This customer feedback loop not only leads to improved products but also fosters brand loyalty and increases profits. Indeed, as these stakeholders experience the tangible benefits of reduced costs and improved operational efficiency within this shared ecosystem, it paves the way for opening doors to partnerships and investments from entities that share similar values. This, in turn, significantly contributes to business growth and longevity.
By striking a balance between the demands of People, Planet, and Profits, businesses can not only navigate shifting risks but also pave the way for growth and resilience in an ever-changing world. This choice, guided by strategic decision-making, is what separates good businesses from the GREAT ones.
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