Sustainability and Reputation Risk

In this paper, we discuss reputational risk that business organizations face as a consequence of sustainability issues. Reputational risks - while they are widely prevalent in the more traditional business areas - are however particularly endemic to sustainability issues, especially when organizations mishandle environmental or social concerns. The paper will accordingly focus on expounding the concept of organizational reputation. We then discuss some examples of loss of reputation, due to inappropriate handling of sustainability issues. Next, we discuss stakeholders that are involved in reputational risk management and also touch on the benefits that accrue to organizations that effectively manage these stakeholder relationships. The paper concludes with a discussion on corporate citizenship as a means of managing reputational risks.