Imagine a Plains Indian, on horseback, surrounded by tens of thousands of stampeding, 2000 pound beasts. The horse and bison are moving at literally breakneck speeds. He hunts with only a crude bow and arrow and has very little protective equipment. The brave fully understands the risks and through long years of training and shared tribal wisdom has mitigated them. He is an expert risk manager. He has to be if he wants to see the sun rise tomorrow.
The Plains Indians were also experts on sustainability. They only hunted when they needed food. When they killed a buffalo, they used every part of it, wasting nothing. They made tepee coverings, bedding, clothes, moccasins, and robes from the hide. The hair was used for rope and halters, the hoofs for rattles. The horns were used to make dishes and spoons and ladles. They made glues, toys, drums, belts, shields, boats, needles, thread and more from the carcass. And they ate very, very well.
Over the years this connection between risk management and sustainability faded. Each evolved differently, risk management gaining in importance as mankind entered the industrial and technological eras. Sustainability deemphasized as we believed in the seemingly endless bounty of nature.
Today we face hard realities about the availability and cost of capital, natural, human and financial. Citizens, business people and governments have to make very hard decisions about how to run their lives and operations, design and construct the built environment and plan for the future. Sustainability has come back into style to help shape the economic, human and environmental decisions that must be made. Risk management has evolved into “Enterprise Risk Management” as it now considers managing risk but also maximizing opportunity.
Clearly, just like the Plains Indians, we need to integrate risk management and sustainability as we face our challenges. From living healthy lives to running a profitable business to responding to finite natural resources and dangerous climate change we face risks and opportunities that are best addressed in a framework that combines risk management and sustainable practices.
The sustainable risk management process has several distinct steps:
Risk and sustainability have always been intertwined. When humans deemphasized sustainability in times of perceived abundance we unwittingly increased the risks we face today and tomorrow. As the environment degrades, natural capital is stressed and the climate becomes unfriendly we will find the answers and actions we must take through the sustainable risk management process. Like the Plains Indians we will act to manage risk and become more sustainable to improve the quality of our lives and those of future generations.
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