Essay about Financial Markets And Natural Disasters

Essay about Financial Markets And Natural Disasters

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Discussions regarding financial markets and natural disasters often center on risk management, highlighting the extreme losses than can occur. As risk management progresses into companies all over the world, determining the amount of risk present, and adjusting those risks in the best way suited for future objectives must be taken into consideration. Researchers are focusing on ways to calculate and diminish uncertainty, as well as detect, mitigate, and transfer the risk associated with over-industrializing and expansion of companies. Organizations must establish procedures that monitor the uncertainty of their operations. Coca-Cola Enterprises serves as a model by focusing on the prevention aspect of risk management, rather than reacting and responding after natural disasters have occurred.
An event is uncertain if its result affects any aspect of an operation. Risk management recognizes the concept of uncertainty, which incorporates risks (negative outcomes) and opportunities (advantageous outcomes). As an official and disciplined practice, risk management has been incorporated into operations of all magnitudes. It includes identifying risks, assessing their probabilities and consequences, developing management strategies, and monitoring their state to maintain situational awareness of changes in potential natural and social threats (Risk Management). Likewise, risk can be introduced by external threats, due to the constant changes in social, political, or economic landscapes.

The establishment of risk management in a business will reduce the likelihood of a disturbing event and the magnitude of its impact. This complex process is a continuous development that has transformed into a key issue in businesses both large and smal...

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...curred, this enterprise succeeds in collaborating a partnership between financial and natural needs. Coca-Cola assesses its social and environmental risks annually, which include health and wellness trends, adverse weather, and global climate changes (Committed to 2020: Shaping a Sustainable Future in Europe).
As John Brown, Director of Risk Management Supply Chain and Technical at Coca-Cola, states, this supply chain strives to prevent any possible dangers that can result from their ongoing expansion. “This approach ensures that risks are identified and managed at the local level, which in itself is true risk management across the enterprise. The sweet spot is where we can identify systemic risks across multiple entities and then apply higher level resources to solve these risks once, instead of multiple times, and with sometimes different approaches” (Brown).

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