Understanding the Context of Organization(s)
The context of every ISO management system standard (Clause 4) has three important considerations for the organization to consider:
What is relevant to its purpose and that affects its ability to achieve the intended outcomes of the management system?
How does the organization establish a risk-based approach for determining actions that can pose an adverse effect and those that can pose a beneficial effect?
Context changes from facility to facility in the scheme of a corporation having operating facilities and supporting suppliers. All the facilities will have its own internal and external context. The corporate office shares its leadership with all the facilities through the internal context.
The greatest confusion regarding the context can be resolved by replacing that old investment term – “risk and opportunity” – Replacing it with “potential adverse effects” (threats) and potential beneficial effects” (opportunities). Even though ISO 14001:2015 did the right thing with this important clarification, they continue to use the old investment term - “risk and opportunity throughout the document.
Organizational leaders see the context of an organization as including the following:
Understanding the organization through the context of all its operations and those of its suppliers
Understanding the interests of the stakeholders interacting with separate facilities around the globe
Determining the scope of the management system at each operating facility and supplier
Establish, implement, maintain, and continually improve the management system at each facility and for the corporation.
However, there are still leaders of large corporations that feel the context of the organization is established at the corporate office.
Organizations operate in an uncertain world. Whenever an organization seeks to meet its objectives, there is a chance that everything will not go according to plan. It is possible that the organization will not achieve its objectives even if the objectives were carefully planned. Because risk is the effect of uncertainty on achieving objectives, it is important to examine the influences and factors in the internal and external context that can influence the organization’s objectives.
It will be interesting to see how the field of ESG will look at the context described in ISO. I have not observed ESG use ‘organizational’ risk and risk management. It seems to have a focus on traditional risk which has a focus on threats-only and the losses that may be offset with an insurance policy. How should ESG work with a corporation that has facilities in more than 100 countries?
Dr. Bob Pojasek
Sustainability Legend | ESG Reporting & Disclosures | Uncertainty Risk | Pollution Prevention Expert | Process Improvement | Organizational Sustainability Reporting | Sustainable Procurement Professor
Chairman, Education and Research Executive Board (EREB)
VCARE Academy Inc. Managing Director
Center for Corporate Performance & Sustainability
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