STRATEGIC BUSINESS RISK ASSESSMENT-AN APPROACH FOR FINANCIAL CHARACTERISATION OF SOCIAL AND ENVIRONMENTAL RISKS

2000 ◽  
Vol 40 (1) ◽  
pp. 603
Author(s):  
A.R. Bowden ◽  
J.H. Martin ◽  
J. Mitchell
Keyword(s):  
Risk Management ◽  
Financial Reporting ◽  
Asset Management ◽  
Financial Risk ◽  
Social Issues ◽  
Petroleum Industry ◽  
Environmental Risks ◽  
Business Risk ◽  
Wide Range ◽  
Social And Environmental Risks

Environmental and social issues are now well established within the business risk profile of petroleum companies. Community outcry in relation to events like the Brent Spar disposal controversy, and public reaction over siting and approvals of a gas pipeline in Thailand, have exposed the commercial consequences associated with public disaffection. Despite their obvious financial impact, social and environmental risks are often not adequately addressed in business risk management strategies, due to the perceived difficulty in analysing these risks in financial terms.This paper presents an innovative, systematic approach for identifying and characterising social and environmental risks in financial terms, and developing prioritised strategies for holistic business risk management. This approach has been developed and successfully employed in a wide range of applications, including comparative financial risk assessments of project options; determination of the financial risk of acquisitions; financial reporting of contingent liability; developing financial assurance bonds; and development of asset management plans. The approach has substantial application in the petroleum industry.

Corporate sustainability through non-financial risk management

2014 ◽  
Vol 14 (4) ◽  
pp. 575-586 ◽  
Author(s):  
Anson Wong
Keyword(s):  
Sustainable Development ◽  
Risk Management ◽  
Management System ◽  
Financial Risk ◽  
Social Issues ◽  
Corporate Sustainability ◽  
Effective Management ◽  
Financial Risk Management ◽  
Content Type ◽  
Risk Management System

Purpose – This paper aims at highlighting the significance in developing non-financial risk management, emphasizing the need of managing environmental and social issues for enhancing corporate sustainability. Particularly, through discussing the implications of non-financial risk management, its benefits, opportunities and challenges will also be presented. Design/methodology/approach – Drawing on authoritative academic literature, reports of corporations’ studies, current articles and documents, the researcher has managed to examine and construe the development and implications of non-financial risk management. Findings – Several key findings are covered in this article. First of all, environmental and social concerns are usually being deemed as intangible issues that need to be properly articulated and managed by an effective non-financial risk management system for enhancing corporate sustainability. Second, through different interpretations of sustainability, links could be drawn for highlighting the significance of non-financial risk management and corporate sustainability. Third, by explaining the impacts from non-financial risk management to sustainable development and profits, the article has illustrated corporate sustainability as a clear business case for any corporation. Fourth, challenges are also portrayed for the effective management of non-financial risk management by corporations. Finally, and most importantly, the need of a systematic and strategic non-financial risk management system for helping businesses to be more competitive, thus, moving closer to sustainable development, is discussed in this paper. Originality/value – The contribution of the article is thought to be significant. Although there exists a wide body of research on sustainable development, risk management and corporate sustainability, there is limited insight into how the corporations can effectively conceptualize such intangible or non-financial risk in relation to sustainability. Integrating environmental and social risks is critical to the effective management of any corporation’s real risks, and to improve resources allocation in a sustainable fashion. This demands a systematic and strategic identification of issues through non-financial risk management. Most significantly, this article has shown the way this can be achieved by any corporation, and the concepts can be applied globally.

scholarly journals New risk measures for variance distortion and catastrophic financial risk measures

2021 ◽  
Vol 25 (6) ◽  
pp. 165-184
Author(s):  
V. B. Minasyan
Keyword(s):  
Risk Management ◽  
Financial Risk ◽  
Risk Measures ◽  
Financial Risks ◽  
Large Set ◽  
Business Risk ◽  
Distortion Functions ◽  
Significant Area ◽  
Theoretical Risk ◽  
Distortion Risk Measures

In recent years, expectation distortion risk measures have been widely used in financial and insurance applications due to their attractive properties. The author introduced two new classes of financial risk measures “VaR raised to the power of t” and “ES raised to the power of t” in his works and also investigated the issue of the belonging of these risk measures to the class of risk measures of expectation distortion, and described the corresponding distortion functions. The aim of this study is to introduce a new concept of variance distortion risk measures, which opens up a significant area for investigating the properties of these risk measures that may be useful in applications. The paper proposes a method of finding new variance distortion risk measures that can be used to acquire risk measures with special properties. As a result of the study, it was found that the class of risk measures of variance distortion includes risk measures that are in a certain way related to “VaR raised to the power of t” and “ES raised to the power of t” measures. The article describes the composite method for constructing new variance distortion functions and corresponding distortion risk measures. This method is used to build a large set of examples of variance distortion risk measures that can be used in assessing certain financial risks of a catastrophic nature. The author concludes that the study of the variance distortion risk measures introduced in this paper can be used both for the development of theoretical risk management methods and in the practice of business risk management in assessing unlikely risks of high catastrophe.

FINANCIAL RISK MANAGEMENT IN ENTREPRENEURIAL ACTIVITY: CONCEPT, SYSTEM AND PRINCIPLE OF BUILDING

2020 ◽  
Vol 2 (4) ◽  
pp. 62-67
Author(s):  
M. M. KHAYTANOVA ◽  
Keyword(s):  
Risk Management ◽  
Financial Risk ◽  
Entrepreneurial Activity ◽  
Financial Risks ◽  
Study Methods ◽  
Financial Risk Management ◽  
Concept System

The article reveals: theoretical justifications of the concept of “financial risk” in relation to the sphere of entrepreneurship; methods for its identification and processing. Financial risk management is the activity of identification, assessment, control and monitoring of risks. In the course of the study, methods for managing financial risks in entrepreneurial activity and their classification were identified.

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