OPERATIONAL RISK MANAGEMENT AS A DRIVER OF BUSINESS SUSTAINABILITY

Olga Caminschi

Abstract


In the context of increased competition, digital transformation, and uncertainty, sustainable development is a strategic objective for businesses. Employee well-being, ethical management, and customer and stakeholder trust, as the social aspect, can be undermined by unaddressed operational risks. Inefficient use of resources, environmental incidents, and failure to comply with environmental standards, as environmental aspects, pose risks that impact long-term stability and market position. An effective operational risk management system increases management transparency, strengthens accountability and the distribution of responsibilities, and improves the internal control system, thereby enhancing the governance component. The purpose of this study is to determine how operational risk management can support sustainable business development and contribute to strengthening competitiveness. The research combines theoretical analysis with quantitative approaches, including the evaluation of operational risks through key risk indicators and their relationship with sustainability metrics. The results indicate that embedding operational risk management into core business processes increases organizational resilience and lowers exposure to disruptions. The article may be useful for managers, risk specialists, researchers, and policymakers.

Keywords


risk and risk exposure; sustainability; business performance; sustainable development;

Full Text:

PDF

References


Aven, T. (2015). Risk analysis. John Wiley & Sons. https://doi.org/10.1002/9781119057819

BP. (2018). BP annual report and form 20 F 2018. BP p.l.c. https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/investors/bp-annual-report-and-form-20f-2018.pdf

Crouhy, M., Galai, D., & Mark, R. (2014). The essentials of risk management (2nd ed.). McGraw Hill Education. https://books.google.rs/books?id=bwlPAgAAQBAJ

Deloitte. (2021). The future of risk: Enhancing resilience through business continuity planning. Deloitte Insights. https://www2.deloitte.com/global/en/pages/about-deloitte/articles/building-the-resilient-organization.html (www2.deloitte.com in Bing)

Deloitte. (2024). Poor mental health costs UK employers £51 billion a year for employees. Deloitte UK. https://www2.deloitte.com/uk/en/pages/press-releases/articles/poor-mental-health-costs-uk-employers-51-billion.html (www2.deloitte.com in Bing)

European Banking Authority (EBA). (2023). Risk assessment of the European banking system. Publications Office of the EU. https://doi.org/10.2853/634573

Edelman. (2023). 2023 Edelman trust barometer: Navigating a polarized world. Edelman Trust Institute. https://www.edelman.com/trust/2023-trust-barometer

European Commission. (2021). European Green Deal: Commission proposes transformation of EU economy and society to meet climate ambitions. Brussels: European Commission. https://ec.europa.eu/commission/presscorner/detail/en/ip_21_3541

Frigo, M. L., & Anderson, R. J. (2014). Strategic risk management: A foundation for improving enterprise risk management and governance. COSO. https://www.coso.org/Documents/Strategic-Risk-Management.pdf

Hopkin, P. (2018). Fundamentals of risk management: Understanding, evaluating and implementing effective risk management (5th ed.). Kogan Page. https://doi.org/10.4324/9780749483074

IBM Security & Ponemon Institute. (2022). Cost of a data breach report 2022. IBM. https://www.ibm.com/reports/data-breach

International Energy Agency (IEA). (2022). Energy efficiency 2022. Paris: IEA. https://www.iea.org/reports/energy-efficiency-2022

ISO – International Organization for Standardization. (2015). ISO 14001:2015 Environmental management systems – Requirements with guidance for use. ISO. https://www.iso.org/standard/60857.html

Kaplan, R. S., & Mikes, A. (2012). Managing risks: A new framework. Harvard Business Review, 90(6), 48–60. https://hbr.org/2012/06/managing-risks-a-new-framework

Linsley, P. M., & Shrives, P. J. (2014). Risk reporting: History, definition, and future directions. Palgrave Macmillan. https://doi.org/10.1057/9781137336375

McKinsey & Company. (2022). Climate risk and response: Operational resilience under pressure. McKinsey Global Institute. https://www.mckinsey.com/capabilities/sustainability/our-insights/climate-risk-and-response

PwC. (2022). Risk and resilience: A guide to navigating uncertainty. PwC Global. https://www.pwc.com/us/en/private-company-services/publications/assets/pwc-gyb-risk-resilience.pdf

Taleb, N. N. (2010). The black swan: The impact of the highly improbable (2nd ed.). Random House Trade Paperbacks. https://www.penguinrandomhouse.com/books/176226/the-black-swan-second-edition-by-nassim-nicholas-taleb




DOI: http://dx.doi.org/10.12709/mest.14.14.02.10

Refbacks

  • There are currently no refbacks.