It is a central component of risk management and refers to the regular reporting of all relevant risks in a company.
Effective risk reporting provides important information for identifying risks and monitoring and evaluating risk management measures. It also helps to identify risks at an early stage and thus minimize potential negative impacts.
Risk reporting is becoming increasingly important in the context of ESG (environmental, social, governance) risk management. Companies need to address ESG factors that can impact their business. These include climate change, for example, which can impact many companies' business models. Risk reporting enables companies to assess the impact of these factors on their business and take appropriate risk management measures.
A well-designed risk reporting strategy is also essential for compliance with regulatory requirements. Regulators require companies to systematically and transparently present and assess their risks. Comprehensive risk reporting supports compliance with regulatory requirements and prevents potential penalties and sanctions.
