In the dynamic landscape of the evolving manufacturing sector, social risk mitigation has risen to prominence as a crucial business pillar demanding the attention of today’s modern CEO. To effectively navigate this realm, leaders must not only prioritise social risk mitigation but also champion human sustainability—a cornerstone initiative that involves businesses making positive contributions to human capital within society. A recent Deloitte survey revealed that eight out of ten CEOs are facing mounting pressure to publicly commit to enhancing human sustainability initiatives.
Yet, to successfully manage social risk, manufacturers must embrace human sustainability and pivot from a business-focused approach to a people-centric mindset.
Human sustainability MUST be a key aspect of social risk mitigation
The Risk Management Magazine describes social risk as “a manifestation of what goes on around us and is driven by influences inside every one of us—beliefs, emotions, mental health, fears and anxieties.” Lack of social risk mitigation in the manufacturing sector can lead to various challenges, such as unethical supply chain practices, quality control issues, workplace accidents, and environmental liabilities. All of which can ultimately affect accelerated workforce 4.0 turnover, production efficiency and profitability.
The modern CEO actively acknowledges the importance of identifying, assessing, and addressing social risk vulnerabilities while advocating for human sustainability. However, despite the momentum growing in this aspect of the business, there is still more work to do.
From legacy to modern: changing the CEO mindset
Retired Deloitte managing director Jen Fisher emphasises that embracing human sustainability can lead to significant benefits for businesses, but achieving this goal will necessitate a re-evaluation of traditional leadership practices. “Leaders should move away from a legacy mindset that centres on extracting value from people and instead embrace the concept of human sustainability, which can support the long-term, collective well-being of individuals, organisations and society,” she cautioned.
Savvy CEOs acknowledge human sustainability, and a people-centric approach is at the heart of social risk mitigation, as it aims to protect a business’s reputation while supporting their communities, employees, stakeholders and clients. In fact, a recent Deloitte report highlights that human sustainability is gaining traction as a critical priority, with more than three-quarters of C-suite executives indicating they would support mandatory company reporting to showcase their metrics in this area publicly.
It is imperative for all CEOs to develop a human-centric mitigation strategy to safeguard against social risk vulnerabilities. Below, we will delve into the primary risks and delineate impactful solutions.
The future is bright for the human-centric manufacturer
It may sound altruistic but prioritising human sustainability within social risk mitigation initiatives has various benefits, including better brand reputation and improved employee retention. CEOs who acknowledge the critical nature of social risk can unlock empathetic engagement that can foster communities, employees, and critical stakeholders and ultimately address social risk more effectively.
By adopting the above strategies with the addition of new training approaches, such as INCIT’s Smart Industry Readiness Index/COSIRI Programme, manufacturing CEOs can mitigate social risk and fortify their position for long-term growth and enhanced competitiveness in the global market.
