Sarah Gordon*1 & the Satarla team - Integrating ESG into decision making through enterprise-wide...
Updated: May 12, 2021
Integrating ESG into decision making through enterprise-wide risk management
The obligation to adhere to regulations on a “risk basis” or to ensure that material risks have been reported to members is a requirement common to almost any organisation. While these governance rules mean that risk management is prolific within all companies, it doesn’t necessarily mean that it is useful.
If used properly, risk management should be a simple, dynamic mechanism through which individuals across an organisation can acknowledge and share potential threats and opportunities to the achievement of objectives. It should be nimble enough to anticipate change and instigate proactive action so that uncertain events are controlled where possible. Risk management is therefore a decision making tool that also serves to build and maintain a trust-filled and transparent culture throughout the organisation1.
Enterprise Risk Management (ERM) is the term given to the all-encompassing risk management that pulls together risks from across an organisation or team [See Figure 1]. This holistic view of everything from health & safety through to financial risks enables risks to be compared and balanced, allowing a path to be chartered between the ever-changing opportunities and threats. No path will be perfect - some risks always need to occur. The opportunity for the organisation that uses ERM is for them to decide and determine which risks should occur, and which can be avoided.
ERM is not complete without including the different facets of Environment, Social and Governance (ESG). Often conflicting and hugely uncertain, ESG risks provide some of the most interesting debate for a (risk) management team. In return, Enterprise Risk Management provides the framework through which ESG can be incorporated into the broader decision making within an organisation. These decisions may be anything from:
- “should I invest in that company?” – a decision that increasingly needs to show evidence of having considered ESG;
- “should I turn this furnace off given that I have just found a crack in it?” – a decision that while it may lose you your production bonus, will keep your colleagues safe;
- “what volume of rock should I include in this reserve statement?” – a decision that is increasingly being guided by updates to resource and reserve reporting codes and standards 2,3.
All of the above decisions have risks that need to be balanced in order to come to your conclusion.
This talk will explore how Enterprise Risk Management is not only good governance, but can also act as the mechanism through which ESG can truly be incorporated into your decisions.
Fig 1. Enterprise-wide risk management pulling together different types of risk management so that integrated decisions can be made. ©Satarla 2019
 Gordon, S.H (2019) Responsibility in Mining: How to make difficult decisions. SGA 2019 Plenary talk abstract.
 Steele-Schober, T. (2021) SAMESG. ESG Toolbox for Responsible Sourcing conference talk. www.responsiblerawmaterials.com
 Burnett, M. (2021) PERC. ESG Toolbox for Responsible Sourcing conference talk. www.responsiblerawmaterials.com
Having completed her PhD at Imperial College, Sarah went to work as a Geologist for Anglo American. She was lucky enough to live and work all over the world in a variety of functions from exploration through to sustainability, risk management and assurance. This grounding allowed her to explore different risk management techniques and uses, applying them to real situations.
Sarah co-founded Satarla in 2014. Now with 90 Associates based globally and offices in London, Sydney, Johannesburg and Toronto, Satarla provides risk management consultancy, training and research to organisations from sectors such as healthcare, agriculture, charities, finance, together with petrochemicals, energy, oil & gas, and mining. Specialising in making risk management practical and accessible to all those that use it, Sarah most enjoys projects through which a company’s culture can be evolved to meet its values and purpose. In recent years, this has focused on integrated risk management with a focus on Environmental, Social and Governance risks.
Sarah is an honorary lecturer at Imperial College London and Research Associate at the University of Johannesburg. Voted as one of the top 10 most inspirational women in mining in 2016, she is also a trustee of Geology for Global Development and co-founder of Responsible Raw Materials.
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