FERMA survey highlights digital and climate risks

Aside from COVID-19, digital risks continue to be seen as the most significant threats to business in the short and medium-term, with climate change and environmental damage the number one long term risk, according to the 2020 European Risk Manager Report.

The Federation of European Risk Management Associations (FERMA) 10^th report is the widest survey of risk managers available, featuring input from 764 professionals in 34 countries.

Although the survey took place in early 2020 before the implications of COVID-19 were fully apparent, FERMA believe it clearly demonstrates that risk managers are strengthening their position and their capacity to contribute to the recovery and sustainability of their organisations.

“There are a lot of expectations on risk managers at the moment and it is a very challenging time,” said Françoise Bergé, a partner at PwC, speaking on the panel of a webinar held on June 29 to celebrate the launch of the report.

“But we need to find ways to engage the general management, the board, in conversations about corporate resilience.”

Fortunately, 2020 seems like a year when the C-suite will listen and the FERMA survey also demonstrated the rising status of the risk manager with their organisations, with 74% of risk managers now saying they assess risks that could impact the relevance and viability of their organisation’s strategy and objectives.

The challenge is how to use that new status to effectively influence key decision makers and move from an insurance and compliance approach towards seeing risk as integral to corporate strategy.

Panelist Oliver Wild, Group Chief Risk, Insurance and Internal Control Coordination Officer at Veolia, France, urged risk managers to start to analysing – and presenting – risks in a more holistic way.

“When you are having conversations [with senior management] think about how one element can influence another,” he said. “How can digital transformation help you with your sustainability goals? Try not to oppose different risks. Look at the flip side of the risk and ask: what you can do to bring that into your company?”

Also, think about how to really use your colleague’s specialist knowledge effectively. “I often say that risk managers are experts in nothing,” said Wild. “What we do is bring our colleagues’ collective intelligence together… we are good at arranging the dialogue.”

These important conversations seem to have already begun with more than one-third of risk managers reporting that they are directly involved in the management of risks related to the adoption of new technologies, and 40% saying they are already or plan to play a role in assessing environmental, social and governance-related risks, according to the FERMA report.

The key to success is embracing these changes and constantly adapting your practice in response. “Risk management is not a destination, it is a journey, and you will be on it forever,” said panelist Adriana Cavaliere, Corporate Risk Manager at Skeyes, Belgium.

“Make your passion your profession!”