When entering new markets, a company may face conditions that call for an increased focus on risk to avoid harm to people, society, and the environment.
To increase the chances of success, companies should act responsibly and follow principles of good business practice. Good business practice is a collective term used to describe work within business ethics, corporate responsibility, and responsible business conduct.
Companies seeking to publish a solution on The Explorer must confirm that they comply with good business practice.
“The main reason we require Explorer companies to comply with good business practice is that we want them to succeed. We know that acting responsibly is a prerequisite for achieving the highest possible return over time and makes companies better equipped to handle risk,” says Head of The Explorer Helene Friis.
Companies that prioritise a responsible approach have better and more stable financial results than companies that do not.
Moreover, there is a clear connection between a company’s dedication to good business practice and how easily the company attracts new capital and how attractive it is as a brand and an employer.
“We also see that companies working with risk mitigation minimise the chances of involuntarily contributing to corruption, human rights violations, or other negative impacts on local communities or the environment,” says Friis.
A responsible approach can be ensured by conducting due diligence assessments. In this process a company works systematically to identify and mitigate negative impacts of both its own operations and its business relationships.
Systems to reduce risk may also consist of stakeholder engagement, implementation of codes of conduct, training of employees in good business practice, or putting in place whistleblowing procedures.
“Businesses will play a crucial role in achieving the UN Sustainable Development Goals. The Explorer promotes business development that does not come at the expense of people, society, or the environment. If serious matters are uncovered that are in breach of principles of good business practice, these may constitute grounds for the solution to be deleted from The Explorer,” explains Friis.