Assignment on Sustainability Risks

Running Head: SUSTAINABILITY RISKS 0
Sustainability Risks
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SUSTAINABILITY RISKS 1
Introduction
In today’s competitive business world, every organisation has been facing risks in one
or the other way. Even there are sustainability risks in companies as well which requires
appropriate measures to prevent it and generate better outcomes. In business, risks exposure
consists of different factors that can lead to failure or lower the profits of a company
threatening the ability while achieving or meeting financial goals. However, sustainability
risk is where companies are not able to sustain their growth due to certain practices resulting
in system destruction of value chain based on the negative externalities overall impacting
other related systems as well (Alon & Vidovic, 2015). This paper will focus on the
sustainability risks taken by BAE Systems which is an aerospace, defence and security
company globally. The aim of this paper is to analyse the sustainability risks of the company
affected its overall reputation and the ways of mitigating risks for removing them completely.
This will also cover the type of local regulations that can be used within the company to
report or remove such risks.
Company’s Overview and its Sustainability
BAE Systems works with over 83,200 individuals across the globe providing road-
ranging products and services where the company’s sustainability initiative defines industry’s
best practices, sustainable thinking incorporation, total cost of ownership, and energy and
water consumption reduction and management in relation to waste decrement and operations.
BAE Systems takes a proactive approach to reduce carbon footprint and to lower the
operating expenses (Army, 2018). The company’s corporate social responsibility (CSR)
defines the commitment towards betterment of employee while lowering costs and taking
care of the environment and employees in the workplace. The guidance provided by “Global
Community Investment Strategy” to the company aims at building and fostering beneficial

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relationships between people, business and local stakeholders (Gramlich & Finster, 2013).
While taking sustainability initiatives, company also faced some risks that affected the
overall reputation of BAE Systems and its stakeholders.
Sustainability Risks
Across the globe, organisations are facing sustainable risks created due to major
trends consisting environmental, and geopolitical and economic risks as well affecting
companies and their reputation. The sustainability global trends can risk companies with
waste management, litigation, reputational cost, rising energy cost, regulation increment,
breaching resulting in fines or penalties, loss of regulatory licence to operate, and competition
increment for and cost of raw materials (Torres-Ruiz & Ravindran, 2018). It is essential for
BAE Systems to improve sustainability risk by managing for capturing sustainability
opportunities to achieve outperformance in long-term effectively. Such risks can impact the
company’s supply chain, its competitive advantage, health and safety of employees along
with their opportunities, diversity due to cultural differences, and resources depletion due to
environmental factors such as global warming, climate change and pollution along with
improvisation due to high demand can affect the reputation of the company (BAE Systems,
2020).
BAE Systems go through both financial and non-financial risks in business as per its
daily operations conducted while determining the extent and nature of risks. In the company,
these risks are identified as per the chance of occurrence and potential impact which are
required to be managed and mitigated. Corporate Responsibility (CR) Committee of the
company focuses on the safety performance along with mitigating and eliminating risks
consisting trips, slips and falls, working in confined spaces, and machinery operation along
with explosion risks based on the weapons manufacture under the “Group-wide Health and