12.1 Introduction
The environmental, social, and technological changes present both risks and opportunities. Managing risks has become more challenging due to these changes
continously affect company survival. Therefore, companies should manage risks
and embrace opportunities deriving from economic, environmental and social
aspects to sustain longer.(World Business Council for Sustainable Development
2017). Many companies have begun to integrate sustainability in their risk management process as a mean to sustain the business and meet the stakeholder needs. In
addition, the company are also being pressured to address sustainability issues by its
stakeholders, thereby, requesting it to manage sustainability risks effectively. Stakeholders are more interested in understand how the company manage sustainabiity
issues affecting society. Sustainability risk management (SRM) touches every aspect
of company ability to manage environmental and social responsibility risks to
enhance stakeholder value for long-term company survival (Lam, 2017). Precisely,
SRM assists the companies to have better preparedness to address sustainability risks
with a range of tools such as stress testing and scenario analysis. Quantifying
sustainability risk is challenging because historical analysis failed to translate the
risk into monetised value. According the survey conducted at the WBCSD delegates
meeting, about seventy percent of the sustainability and risk professionals stated that
their organisation did not have a proper risk management process to quantify
sustainability risks (World Business Council for Sustainable Development 2017).
The underlying premise of SRM is that every organisation can quantify and translate
sustainability risks into monetary value. As a result of rapid urbanisation and
industrial growth over the past two decades, Malaysia has also been affected by
climate change turbulence (Begum et al. 2011) and flood disasters. Emerging
sustainability issues such as environmental degradation and ecological disaster result
from agricultural, industrialisation, and socialisation activities which affecting the
society at a large should be seriously attended (Mahadi et al. 2011). In line with the
Malaysian government’s effort to promote sustainability practices in the business
strategies, the study on SRM warrants significant attention. Relatively, little empirical research focus on SRM implementation (Manab & Aziz, 2019; Wijethilake &
Lama, 2019). In response,this study aims to examine the impact of SRM practices on
the company survival, among the environmentally sensitive companies in Malaysia.
12.2 Literature Review
Sustainability risks have grown in prominence following the occurrence of a number
of environmental disasters leading to direct financial losses and reputational impacts.
These risks are often ignored by the management due to lack of tools and methodologies (Cort and Gudernatch 2014). Because of these concern, SRM is the best
approach to manage risks associated with sustainability issues (Anderson 2005;
196
N. A. A. Aziz and N. A. Manab
The environmental, social, and technological changes present both risks and opportunities. Managing risks has become more challenging due to these changes
continously affect company survival. Therefore, companies should manage risks
and embrace opportunities deriving from economic, environmental and social
aspects to sustain longer.(World Business Council for Sustainable Development
2017). Many companies have begun to integrate sustainability in their risk management process as a mean to sustain the business and meet the stakeholder needs. In
addition, the company are also being pressured to address sustainability issues by its
stakeholders, thereby, requesting it to manage sustainability risks effectively. Stakeholders are more interested in understand how the company manage sustainabiity
issues affecting society. Sustainability risk management (SRM) touches every aspect
of company ability to manage environmental and social responsibility risks to
enhance stakeholder value for long-term company survival (Lam, 2017). Precisely,
SRM assists the companies to have better preparedness to address sustainability risks
with a range of tools such as stress testing and scenario analysis. Quantifying
sustainability risk is challenging because historical analysis failed to translate the
risk into monetised value. According the survey conducted at the WBCSD delegates
meeting, about seventy percent of the sustainability and risk professionals stated that
their organisation did not have a proper risk management process to quantify
sustainability risks (World Business Council for Sustainable Development 2017).
The underlying premise of SRM is that every organisation can quantify and translate
sustainability risks into monetary value. As a result of rapid urbanisation and
industrial growth over the past two decades, Malaysia has also been affected by
climate change turbulence (Begum et al. 2011) and flood disasters. Emerging
sustainability issues such as environmental degradation and ecological disaster result
from agricultural, industrialisation, and socialisation activities which affecting the
society at a large should be seriously attended (Mahadi et al. 2011). In line with the
Malaysian government’s effort to promote sustainability practices in the business
strategies, the study on SRM warrants significant attention. Relatively, little empirical research focus on SRM implementation (Manab & Aziz, 2019; Wijethilake &
Lama, 2019). In response,this study aims to examine the impact of SRM practices on
the company survival, among the environmentally sensitive companies in Malaysia.
12.2 Literature Review
Sustainability risks have grown in prominence following the occurrence of a number
of environmental disasters leading to direct financial losses and reputational impacts.
These risks are often ignored by the management due to lack of tools and methodologies (Cort and Gudernatch 2014). Because of these concern, SRM is the best
approach to manage risks associated with sustainability issues (Anderson 2005;
196
N. A. A. Aziz and N. A. Manab