QMS & EMS London

Environmental matters need to be better integrated into overall corporate strategies, an analysis of annual reports of FTSE 350 companies has found. Although environmental factors were identified as principal business risks by 41% of reports studied, only 27% of companies reflected these in their key performance indicators (KPIs), which are used by management to monitor the company’s progress, according to a report of the findings.  The analysis was carried out by the Climate Disclosure Standards Board (CDSB), a consortium of international NGOs and businesses working to make reporting of environmental risk and impacts mainstream.

A new MIT study on supply-chain risk shows no correlation between the total amount a manufacturer spends with a supplier and the profit loss it would incur if that supply were suddenly interrupted. This counter-intuitive finding defies a basic business tenet that equates the greatest supply-chain risk with suppliers of highest annual expenditure. When applied to Ford Motor Co.’s supply chain, the quantitative analysis by David Simchi-Levi of MIT’s Department of Civil and Environmental Engineering and Engineering Systems Division shows that the supply firms whose disruption would inflict the greatest blow to Ford’s profits are those that provide the manufacturer with relatively low-cost components.

Risk management is the ability to identify risk, assess it, and mitigate it. Although there are many definitions of risk management, the following share common attributes: "Risk management is the culture, processes, and structures that are directed toward the effective management of potential opportunities and adverse effects. (AS/NZS 4360:1999--"Risk Management")" "Risk management is the identification, assessment, and response to risk to a specific objective. (Enterprise Risk Management--Integrated Framework, COSO, 2004)"