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Using Impact as a Risk Radar – Internalising Externalities (Video)

March 17, 2017 |

This video was originally published on PwC

Malcolm Preston, PwC Global Sustainability Leader, talks about using total impact as a way to monitor risks and approach internalising externalities.


“All those red bars that we have, or even green bars for that matter, or the bubbles on the Kering chart, those things that are outside, as you point out, the financial system, it’s what we call externalities, they’re outside of it.  But, as Michael said, they’re also a risk radars, they’re a forward looking indicator that almost the bigger the red bar the more likely it is that that externality is going to internalise because society won’t accept it for that long, so it will be a regulation or it will just run out or it will go up in price or it will become scarcer, and those will become risks to your business. |So we actually see this as a really interesting way of looking at, looking forward and saying “what impacts am I having, how does that translate into risk and can I then calculate how that externality might internalise actually into the result to the viability point”.

Watch more segments from this interview at: PwC.

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