CHALLENGES IN APPLYING AN INTEGRATED RISK MANAGEMENT APPROACH TO SOCIAL AND ENVIRONMENTAL ISSUES

Abstract

Global warming, ecosystem destruction, outraged communities, workers compensation, corruption and ineffective governance—these are just some of the myriad of social and environmental risks facing today’s petroleum exploration and production companies. Once perceived as peripheral issues to be dealt with by technical specialists, these issues can now significantly impact on the viability of businesses. In an attempt to manage these risks many organisations have integrated the management of social and environmental risk with other risks to the organisation (financial, legal, technical, governance, etc.). In contrast to some other risk areas, the application of risk assessment to social and environmental issues can involve significant qualitative analysis. The concepts surrounding risk management have broad applications and many organisations struggle with the development of company-specific risk management processes. This paper discusses the limitations associated with the integrated approach and presents tools for improving the quality of the assessment process.