Get to grips with CSR or risk losing consumer trust – almost instantly

As the pressure on companies to build robust corporate social responsibility (CSR) credentials grows, risk managers must face up to the challenges of these new risks, warns John Ludlow, chief executive of Airmic.

Speaking to StrategicRISK moments before opening the conference in Harrogate, Ludlow says that risk registers have long meant companies are aware of the macro risks affecting their companies, but that when it comes to sustainability – the social, economic and environmental impact of their business – it is important to drill down and understand stakeholder sentiment and what signal detection systems can be put in place to identify emerging issues.

The risks of getting sustainability wrong are enormous, he warns. It is a topic that is at the forefront of consumers’ minds and organisations that fail to handle CSR well often get judged in the court of public opinion.

“The power of social media in society means that if you get something wrong or make the wrong decision it damages the trust,” he says.

“A single moment can be stored on social media and destroy the value of a company. Trust is often one of your biggest assets and so the sort of loss you might be most concerned about is the loss of your customers’ goodwill and support for your brand or corporate ambition.”

Sustainability is such an emotive issue that it is critical for risk managers to have processes to track public sentiment, such as social media monitoring tools.

“It is important to listen to what society is concerned about. It’s usually the environment but there will be lots of things that are linked to individual companies. You’ve got a choice: you can either ignore it and carry on regardless or you can address those issues.”

Risk managers must work closely with the communications department, who will use monitoring systems often, he says. “You need to work with the CSR manager too,” he adds.

“Ask yourself ‘what’s my partnering agenda with my CSR manager and how can I collaborate to ensure that the sustainability risks are adequately reflected in risk registers to make the company more sustainable?’”

Airmic is exploring CSR within its conference agenda, kicking off the second day of the conference (4 June) with a variety of wellness sessions and representing charities and within its exhibitions. Beyond the conference, CSR that will be developed by its secretariat, committees and board of directors, with several papers on the topic expected in 2020.