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Risk Impact and Likelihood

It's important to recognize that ESG risks extend beyond financial implications. They can also impact a company's reputation, operational efficiency, regulatory compliance, and stakeholder trust. Therefore, businesses must consider non-financial factors when assessing risk impact. Additionally, evaluating risk likelihood involves analyzing historical data, conducting scenario analyses, seeking expert input, and benchmarking against industry standards.
Once businesses understand the impact and likelihood of ESG risks, they can prioritize their responses accordingly. High-impact, high-likelihood risks require immediate attention and robust mitigation strategies, while low-impact, low-likelihood risks may necessitate monitoring. By integrating ESG considerations into their corporate strategies, engaging with stakeholders, enhancing transparency, and collaborating with industry peers, organizations can effectively manage ESG risks and seize opportunities for sustainable success.
But what exactly do we mean by ESG risk, and how can businesses assess their impact and likelihood? This is the question the document seeks to address.

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Risk Impact and Likelihood

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