The changing nature of global risks, such as those associated with the environment, has changed the way business is done. This has caused the increase in global awareness among people because their impact to people and the environment can be seriously damaging not only to people’s lives but also to other important aspects of society—political, economic, or socio-cultural.
Recent surveys show that global risks are those greatest risks that the world is facing such as water crises, rapid and massive spread of infectious diseases, weapons of mass destruction, failure of climate change adaptation. These risks are interconnected between geopolitics and economics, and those on emerging technologies. It cannot be denied that companies these days operate in constantly changing environment as they are continually faced with new and emerging risks. Stakeholders are finding better solutions to problems; they can be decision-makers, policy-makers, institutions, or practically the citizens themselves, and business people who have serious interests on how they manage the challenges of global risks in their environment.
Global risks have accelerated to increasing levels due to prevailing issues such as environmental degradation. Profound solutions to said problems are designed to address urgently for both short- and long-term periods. Using global governance is one approach that enhances the responses to emerging economies; there has to be proper regulations that set parameters for self-regulation in doing business so that business practices are in order “to establish a set of cushions, bells and whistles to ameliorate the possibility of further systemic crises” (Global Risk).
Go Lite is an example of a company which business is into outdoor and equipment making in Boulder, CO. Its founders, Kim and Demetri Coupounas, specialize in ultra-light packs, sleeping bags and down jackets. As a company, its goal is to mitigate environmental footprint by 100% using Environmentally Preferred Materials or EPMs. Their materials are made up of recycled nylon and polyester. This company has been practicing take-back program wherein it pledges to recycle and reuse items that are returned by its customers (Adams).
Governance. Global risks come in new and unexpected ways. As business people encounter environmental problems which weaken the global economy, like intense water shortages, floods and storms worldwide, through governance, they can develop and apply strategic approaches in using limited resources. Through governance, the system of using strategically the importance of political constituency can reach out to supply chains and reduce the environmental impact of sourcing to some extent (Global Risk).
Governance calls for business sector to use resources well such as replacing fossil fuels with renewable power. The government helps them in the transition of switching from fossil fuels to renewable power. This is the remedy of business people to address energy crisis hence they tap world leaders in solar, wind, marine, and geothermal energies to make their renewable power available in the market to be used in processing and manufacturing of products (White).
Empowering and educating business people across the globe help shed light to decision-makers; collaborative efforts by sharing of knowledge and expertise foster wider understanding of the most pressing issues that confront the world. The increasing recognition of well-studied and effective ways to address global risks and the development of resilient attention are built up to inspire other business people to be accountable for their actions and decisions so that all of these efforts ensure international security landscape and continual improvement for the years ahead (The Global Risks Report 2016). Moreover, the advancements of technology and the rapid digitization efforts have helped arrest the effects of global risks. An example of an application of technology is how to solve the problem of water supply shortages that will affect billions of people across the globe including the business sector. According to the United Nations, the removing of the salt and minerals out of seawater is one way of providing potable water in areas where there are shortages of water (Goudarzi). But as these developments are pursued, proper governance is still needed to manage the transition process to help secure stable economies, safe environment, and more controlled environmental protection programs for the business people.
Self-regulation. Stakeholders practice self-regulation by making them responsible for their own actions through voluntary agreements to cooperate and coordinate with each other in applying common understanding of standards and best practices and in observing codes of ethics that are geared towards fostering safe environment. With self-regulation, government entities regulate their actions through legislation and implementing executive orders and administrative rules and regulations.
The approach to global risks also calls for multi-disciplinary mechanisms wherein business people apply diverse methodologies and knowledge to solve practical problems of the world. They analyze problems and are able to process them when formulating remedies (Global Risk). They engage in fruitful discussions with multi-disciplinary research agenda for possible business opportunities.
Global risks have become diverse that business people are enjoined to stay alert. They engage in global interactions across time and space (Global Risk). Dialogues are engaged across disciplinary boundaries that can be covered academically and through development of policies. This way, business people stay alert to attend to any developments that call for immediate attention and involvement.
Having global mindset follows conscious efforts of moving towards adapting to global risks while building resilience when facing them. Indeed, their impact changes how businesses are conducted. Global risks stir diverse interests of stakeholders whose priorities are aligned with the nature of their businesses. They also unite through collaboration and sustainable cooperation; global risks could just be part of the reality that can easily be overcome and managed with positive results. Business people are given opportunities to grow and develop but efforts are directed towards settling common goals and objectives. It is not enough to lead the world to overcome global risks. What is essential is that business people change the way they conduct business and they try to learn to change according to the demands of time.
“Global Risk.” Global Trend Lab, 2011, http://lauder.wharton.upenn.edu/wp-content/uploads/2015/04/Global-TrendLab-2011-Global-Risk.pdf
“The Global Risks Report 2016-11th Edition.” World Economic Forum, 2016, http://www3.weforum.org/docs/GRR/WEF_GRR16.pdf
Castro, Daniel. “Benefits and Limitations of Industry Self-Regulations for Online Behavioral Advertising.” The Information Technology & Innovation Foundation, December 2011, http://www.itif.org/files/2011-self-regulation-online-behavioral-advertising.pdf
Adams, Susan. “11 Companies considered best for the environment.” Forbes, April 22, 2014, http://www.forbes.com/sites/susanadams/2014/04/22/11-companies-considered-best-for-the-environment/#95972dd574ea
Goudarzi, Sara. “Top 10 Emerging Environmental Technologies.” Live Science, April 19, 2007, http://www.livescience.com/11334-top-10-emerging-environmental-technologies.html
Cann, Oliver. “Top 10 global risks 2015.” World Economic Forum, January 15, 2015, https://www.weforum.org/agenda/2015/01/top-10-global-risks-2015/
White, Sue. “Our top 10 environmental problems.” Environment, December 7, 2009, http://www.abc.net.au/environment/articles/2009/12/07/2764044.htm