Risk Management and Sustainability

Abstract: Sustainability is an ever increasing field of interest in business management. However, the notions of sustainability are elusive and its implications are not always clear. What is clear though is that being sustainable can enhance a corporate organisation’s competitive advantage. Risk management in general, and fire protection in particular, can be argued to inherently provide benefits of a sustainability nature. This implies that the use of investment in fire protection can help make organisations more sustainable. However, present methods for investment assessment are based on old-fashioned economic reasoning that do not account for sustainability in a desirable manner. Therefore, this thesis investigates how the increasing attention to sustainability interrelates with the key concepts of risk management and how these connections can be utilized to further develop the investment assessment procedure to better account for sustainability. An attempt is made to develop a semi-quantitative model for assessment of investments in fire protection measures. The model is based on a multi-attribute utility theory and uses an ordinal assessment scale to rate a number of sustainability factors that are chosen to specifically represent the consequences which may occur due to fires in industrial organisations.