Enterprise Risk Response Strategies: Integrating Environmental, Social, and Governance (ESG) Dimensions

• Grant number: 24/03990-6
• Support Opportunities: Scholarships in Brazil - Post-Doctoral
• Start date: October 01, 2024
• End date: September 30, 2026
• Field of knowledge: Applied Social Sciences - Administration - Business Administration
• Principal Investigator: Fábio Lotti Oliva
• Grantee: Jefferson Luiz Bution
• Host Institution: Faculdade de Economia, Administração, Contabilidade e Atuária (FEA). Universidade de São Paulo (USP). São Paulo , SP, Brazil

Abstract

This research aims to propose a model for defining risk treatment strategies in organizations, with a particular focus on risks related to environmental, social, and governance (ESG) dimensions, as well as to offer an applied model to assist managers. The research is relevant due to the imminent connection between Enterprise Risk Management (ERM), corporate strategy, and the growing ESG concerns. It is original because the theoretical foundations of risk responses and their impacts still inadequately consider the ESG dimensions of organizations, while studies investigating ESG risks are concentrated in the earlier phases of risk management, identification, and risk analysis. The proposed method considers the composition of an initial theoretical model from a systematic literature review, followed by theoretical and practical validation with a panel of experts and subsequent application in a relevant case, through the Design Science Research paradigm. The main theoretical contributions are the distinction and characterization of new concepts of ESG risk treatment, their association with the organization's ERM and ESG intellectual capital, the analysis of current and emerging response strategies to them, and the construction of a theoretical model to consolidate this harmonization. Technological contributions meet managers' interest by presenting an operational model capable of assisting them in defining ESG risk response strategies.