What type of risks can risk assessments identify for sustainability?

Risk assessments for sustainability are comprehensive tools that evaluate various dimensions impacting an organization’s long-term viability and responsibility. The correct answer highlights that risk assessments can identify environmental and social risks, which are critical components of sustainability practices.

Environmental risks encompass threats to natural resources, ecosystems, and biodiversity, influencing how an organization operates and its impact on the planet. For instance, a company may face risks related to pollution, waste management, climate change effects, and compliance with environmental regulations. Understanding these risks is essential for developing strategies that minimize damage to the environment and reduce ecological footprints.

Social risks include factors related to how an organization's practices affect communities, labor relations, and stakeholder engagement. This could involve concerns about labor rights, community impact, and public perception. Companies are increasingly held accountable not only for their financial performance but also for their social responsibility and ethical behavior.

By identifying and addressing both environmental and social risks, organizations can develop more sustainable strategies that support their long-term success while contributing positively to society and the planet, making this approach integral to sustainable business practices.