Risk management needs center stage when implementing the SDGs

PEER-TRISD organized a workshop on the 6th of November bringing together experts from governments, finance, industry, insurance and research to discuss the evaluation and management of risks and sustainable development.

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The event hosted by SYKE was a collaborative effort involving many PEER organizations. The aim was to find and share practical solutions for integrating risk management with the implementation of sustainable development goals (SDGs).

 

Risks and SDGs are related

 

The workshop dscussed how SDGs and their implementation address risks, how risk management considers SDGs and ways for integration.

 

Some key messages came out from the workshop, including the importance of commitment, a solid knowledge-base, pilots and examples of good practice, and evaluation of trends. The more thoroughly discussed messages included the role of information and indicators. There were calls for clear standards and appreciation of applicable SDG indicator sets for example for comparing across countries or organizations. Cherry-picking the most apparent or flattering SDGs and indicators for reporting was considered a risk, even though the merits of starting with familiar goals and data were recognized.

 

With climate risks being already considered in many sectors there is much roam for expanding the consideration of risks and SDGs alongside each other.

 

For the finance world, SDGs broaden the already institutionalized environmental, social and governance (ESG) responsibility considerations. While finance can govern with exclusion, the SDGs bring a more engaging and positive way of governing companies and investments, seeking sustainability impacts. In the insurance sector, risk management, insurance and investments are distinct branches, each increasingly addressing SDGs but with much more room for integrating across the branches.

 

A call for cooperation and empathy

 

There was a call for further cooperation between different sections of society, between citizens and research but also between academia and industry and policymakers. In order for meaningful cooperation to take place, more empathy is needed from all sides.

 

Panelists argued that transformations might benefit from designing transitions in a humble way including more bottom up elements. They suggested that grassroot actors need to be involved in making the change.

 

Participants also talked about the need to prioritize sustainable development goals and the tradeoffs between different goals. While all of the SDGs need to be acknowledged, by trying to focus on all of them simultaneously, one might risk of ending up not significantly promoting any.

 

Forward-looking conclusions to help sustainable transformation take its next steps

 

Familiar entry points can help addressing the 17 SDGs and their complex interactions, and the possible cascading risks connected to them. In order to grasp complex global systemic changes, it might make sense to start simple.

 

The workshop finished with many forward-looking takeaways. “In order to better implement the SDGs we need to make good use of existing knowledge base and different sources of knowledge including indicators, research as well as practical experience. We need to consider all of the SDGs – those that are easy to address and to excel in, those that are challenging but also the ones that seem distant”, concluded Eeva Primmer, Acting Director General of SYKE and host of the conference. 

 

“We also need more frameworks for action: we need to promote large scale transitions in the areas in which much still needs to change and we need to put risk management to the centre of our implementation processes and transition management”, Primmer explained wrapping up the discussion.

 

Plans are laid out well, but implementation often lags behind

 

The workshop was organised back-to-back with EEEN2020: European Environmental Evaluators Network Forum, a three-day conference hosted by the Finnish Environment Institute SYKE addressing development of environmental evaluation. PEER-TRISD hosted also a session in EEEN200, with prestigious speakers Professor Ortwin Renn from Potsdam University, Member of European Parliament Ville Niinistö and Head of Capital Markets Eila Kreivi from the Nordic Investment Bank.

 

While plans made for the SDGs are comprehensive, the implementation processes are often insufficient. Implementation requires perpetual evaluation and management of possible risks.

 

Ville Niinistö, a Finnish member of the European Parliament said that the integration of environmental and economic considerations is still superficial, and holistic approaches await to be put into practice. Professor Ortwin Renn, Scientific Director at the Institute for Advanced Sustainability Studies (IASS) pointed out that all transformations come with risks. The ongoing transformation to a more sustainable system is no different. According to Renn, the systemic sustainable transformation is an interaction of technology, business models, regulation and a combination of private and collective actions by citizens.

 

As Stefano D’Errico, the Head of Monitoring at International Institute for Environment and Development, pointed out during an introductory floor, the formation of the SDGs was groundbreaking, because it was the first time environmental and social issues were considered together in this manner. However, this transdisciplinary approach is not ready, it needs constant development.

 

The PEER-TRISD solutions workshop addressed ways to link risk management and SDG implementation. Thanks to excellent prepared and spontaneous inputs, the workshop identified several important ways for integration:

 

  • Making use of existing knowledge base and using different knowledge sources, including indicators, research and practical experience
  • Considering all SDGs: those that are easy to address and excel in, those that are challenging at this point, and also those that seem distant
  • Starting action: seek to promote large scale transition, address the areas in which much needs to change, engage others
  • Taking risk management at center stage, to support action
  • Assessing  systemic impacts, tradeoffs and synergies: the ways in which different SDGs influence each other, and cascading risks
  • Engaging sectors, organisations, sections of organisations, stakeholders, politicians, citizens, those whose voice is not channeled into processes in the current setting
  • Taking a multidisciplinary and transdiciplinary approach in research and co-generating knowledge with practitioners