Sustainability and Reputation Risk

Abstract

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.