Chapter 06 · Governance & regulationGovernance, Ethics & Risk
Corruption risk
Definition
Corruption risk is the likelihood and potential impact that corrupt conduct — commonly defined as the abuse of entrusted power for private gain — will occur within an organisation's operations, supply chain or markets. It is assessed through risk mapping (geography, sector, transaction type, third parties) and managed through anti-bribery management systems such as ISO 37001, whistleblowing channels and third-party due diligence.
References
Supports definition and framing.
Supports definition and framing.
Overview
What it means
A governance risk that directly degrades sustainability outcomes — weakening environmental enforcement, distorting resource allocation and eroding trust.
How it is used
ESG ratings, investor screening and due-diligence laws treat corruption as a core governance factor; perception indices (e. g. Transparency International's CPI) and experience-based surveys inform country-level assessment.
Why it matters
Corruption systematically undermines environmental and social regulation; managing corruption risk is a precondition for credible sustainability performance, especially in high-risk jurisdictions.