Systemic Planetary Risks

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SYSTEMIC PLANETARY RISKS
Implications for Organization Studies
Gail Whiteman and Amanda Williams
Environmental risks to humans are not new – history is replete with examples of societ-
ies that collapsed alongside ecosystem change (Diamond, 2005). We know that numerous
societies have suered because of environmental pollution from organizational operations
(King & Lenox, 2000; Maguire & Hardy, 2009, Maguire & Hardy, 2013) and from industrial
accidents (Gephart, 1984: Tsoukas, 1999).
However, the scale of environmental risks has changed over the course of the 20th century
from locale-specic threats to those arising at a planetary level (Rockström et al., 2009a,
2009b; Whiteman, Walker, & Perego, 2013). Natural scientists now estimate that four of the
nine essential planetary processes needed to sustain life have exceeded safe thresholds and now
represent signicant risks to humanity (Rockström et al., 2009a, 2009b; Steen et al., 2015a).
In particular, climate change and land-system change are well past safe thresholds and have
entered the zone of increasing risk where the rate of biodiversity loss and phosphorus and
nitrogen release pose high levels of planetary risk. In such a world, organizational “processes of
risk calculation used in modern society fail to work in risk society because risks are no longer
localized and are long term in nature” (Gephart, Van Maanen, & Oberlechner, 2009, p. 145).
Natural scientists further argue that there are solid data to suggest that organizational
and economic activities over time have been the driving force behind the planetary shift
away from the stable Holocene period into what has been called the Anthropocene (Steen
et al., 2015b) – what Nobel Prize winner Paul Crutzen and colleagues describe as period of
time commencing with the industrial revolution where human impact on the environment
became the paramount force of change (Steen, Crutzen, & McNeill, 2007). The central
role of organizations within these shifts seems likely.
However, the complex role of organizations as collective contributors to and recipients
of systemic risks at the planetary level remains underexplored (Winn, Kirchgeorg, Griths,
Linnenluecke, & Gunther, 2011). While the organizational risk management literature is
vast, organizational studies of risk seldom integrate environmental threats into conceptual
frameworks (cf. Bundy, Pfarrer, Short, & Coombs, 2017). In addition, the handful of studies
on environmental risk within the corporate sustainability literature are rm-specic and
focus more on supply chain or operational risks from specic natural events – in terms of
extreme weather (e.g. Linnenluecke & Griths, 2013)– or risks to the natural world through
organizational accidents such as Exxon Valdez (Shrivastava, 1994) or Deepwater Horizon

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(Bozeman, 2011). Integration of planetary risks to, and from, collections of organizational
actors over time is lacking.
The aim of this chapter is to address these gaps. We ask the question, ‘How can research-
ers of organization theory collaborate with managers of organizations to better conceptual-
ize systemic ecosystems risks and develop strategies to insure these are addressed?’ Building
upon advances in Earth System Science, we present a framework for analyzing systemic
planetary risks and consider the role of collections of organizational actors. Our chapter is
organized as follows: we rst set the broader context by reviewing the literature on environ-
mental risk at the planetary scale and on global business discussions on risk. We then review
the organizational literature on environmental risks, and identify the gaps in the organiza-
tional literature evident from the issue addressed in systemic research on environmental risk
at the planetary scale. To help address these gaps in our understanding of organizations and
risk, we present a framework that encapsulates a systemic view of social-ecological risk and
organizations. We close with a discussion of future research needs.
e Landscape of Planetary Risk
To support more eective risk management at the global level, earth system science indicates that
there are nine key global ecosystem processes that collectively interact to create a ‘safe operating
space for humanity’ (Rockström et al., 2009a; Whiteman et al., 2013). These processes include
climate change, biochemical ows of phosphorus and nitrogen, freshwater use, land-system
change, biosphere integrity (biodiversity); ocean acidication, stratospheric ozone depletion,
atmospheric aerosol loading (air pollution); and novel entities (chemical pollution) (Figure 13.1).
Climate change
Novel entities
Stratospheric ozone depletion
Atmospheric aerosol loading
Ocean acidification
Biochemical flows
Freshwater use
Land - system
chang
e
Biosphere integrity
Genetic
diversity
Functional
diversity
Phosphorus
Beyond zone of uncertainty (high risk) Below boundary (safe)
Boundary not yet quantified
In zone of uncertainty (increasing risk)
Nitrogen
Fi gur e 13.1 Planetary Boundaries and Safe Thresholds
Source: Steen et al. Planetary Boundar ies: Guiding Human Development on a Changing Planet, Science, 16
January 2015a. (Credit: F. Pharand-Deschênes /Globaïa).

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The nine boundaries are dynamically interconnected, so risks in one area will trig-
ger increasing risks in others. An analysis of systemic risk factors at the planetary level,
which captures both spatial and temporal dimensions, is thus important. For some parts of
the world, including the Arctic and drought-ridden parts of Africa, the United States and
Australia, climate change impacts are happening already (2018) (droughts, oods, re, etc.;
cf. IPCC,2015) alongside of degradation of land, water, and air pollution (see Le De and
Shrestha, 2018, this volume). In other parts of the world, planetary risks are the most serious
under future scenarios – thus, risks may be mitigated to some extent if deep de- carbonization
occurs in the near-term. While the highest risks of climate change or ocean acidication
have not yet materialized into catastrophic tipping points, the window of opportunity to
address the increasing (and signicant) risks of climate change is closing fast (Figueres etal.,
2017). Thus, planetary risk management requires that the world deal urgently with the
emissions crisis in the near-term, in order to provide us with a safer space to tackle other
entrenched ecosystem problems.
Scholars have identied the period since World War II as the “Great Acceleration,”
whereby industrial processes dramatically accelerated their impact on the structure and func-
tioning of key ecosystem resources including rapidly increasing levels of carbon dioxide,
nitrous oxide, methane, stratospheric ozone loss, surface temperature, ocean acidication,
tropical forest loss, and terrestrial biosphere degradation (Steen et al., 2015b).
While causality has yet to be conclusively proven, given the complexity of these eects, it
is highly plausible that cumulative and collective organizational action is correlated with or
related to systemic degradation of the planet’s key ecosystem processes. Furthermore, these
human-led impacts have, over time, introduced a new landscape of planetary risk that poses
complex and uncerta in threats for humanity and for the organizations that collectively make up
the world as we know it (see Rockström et al., 2009a, 2009b; Steen et al., 2015a; Whiteman
et al., 2013). Natural science data thus support the social science arg ument (Beck,1992; Beck &
Holzer, 2007) on risk societies: that “the success of the wealth- generating industrial society
has produced a situation in which the risks and problematic by-products of wealth generation
have become the new basic organizing principle and a key concern for society (Lupton 1999b,
p. 59)” (in Gephart et al., 2009, p. 145). We argue that this is an area ripe for conceptual and
empirical development for organization studies.
Organizational Literature on Risk and the Natural Environment
The literature on risks and the natural environment has shown that organizations can
reduce vulnerability to risks by preparing for potential disturbances and by developing
coordination techniques within organizations and with other stakeholders (Williams,
Gruber, Sutclie, Shepherd, & Zhao, 2017). Two main streams of research explain how
managers prevent crises through eective risk management. The internal perspective
focuses on organizational preparedness and how managers build capabilities to manage
unexpected events (Bundy etal.,2017). For example, research on high-reliability organi-
zations demonstrates that eectively correcting errors and remaining exible can prevent
crisis (Weick& Sutclie,2001). The external perspective suggests that relationships with
stakeholders inuence managerial capacity to manage risks (Bundy et al., 2017). Relation-
ships with stakeholders can provide the knowledge and resources necessary to facilitate
recovery after a crisis (Williams& Shepherd, 2016; Le De & Shrestha, Chapter 3).
A review of the management literature suggests: (1) the natural environment is notably
absent from leading organizational risk frameworks (see, e.g. Figure 1 in Bundy et al., 2017,

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216
p. 1665) due to the implicit assumption of a stable natural environment, or one that faces linear
change,(2)risk studies from the corporate sustainability literature are either focused on episodic
threats from natural environment (e.g., through extreme weather) or are focused on organiza-
tionally produced risks to the natural environment through industrial accidents, and (3) there
are limited studies that examine systemic feedback loops between organizations and dynamic
ecosystem processes facing threats (see Table 13.1). In Table 13.1, we provide an overview of the
literature along two dimensions. First, we examine if environmental risks are considered at a
discrete point in time or a risk that unfolds as a process over time and space. Then we consider
the directionality of the threat.
On the positive side, organizational researchers recognize that numerous compa-
nies, including the insurance sector, have begun to seriously consider the threat of cli-
mate change over the last ten years, but have failed to integrate climate change risk into
Table 13.1 Overview of Organizational Risk Literature Concerning the Natural Environment
Risk type Studies focused on threats from
the natural environment to
organizations
Studies focused on
organizational threats to
the natural environment
Systemic studies
examining the
feedback loops across
organizations and
between socio-
ecological systems
Discrete
events
- Mann Gulch
(Weick, 1993)
- Victoria Bushres
(Linnenluecke & Griths,
2013)
- Climate risks (Beerkhout et
al., 2006; Beermann, 2011)
- Droughts and oods
(Gasbarro, Rizzi, & Frey
2016)
- Pollution (Dobler, Lajili,&
Zéghal 2014)
- Hurricanes (Delp, Podolsky,
& Aguilar 2009)
- Bhopal (Shrivastava,
1992)
- Oil spills
(Pauchant & Mitro,
1992)
- Fukushima
- Other toxic releases
- High risk technologies
(Gephart, 2004)
- Firm contribution
to climate change
and climate
impacts on the rm
(Weinhofer& Busch,
2012)
Processes
over time
- Supply chain risks
(Hofmann, Busse, Bode, &
Henke 2014)
- Chemical industry supply
chain risk (Kleindorfer &
Saad, 2005)
- Mann Gulch (Whiteman&
Cooper 2011)
- Social and environmental
practices (Ortiz-de-
Mandojana & Bansal, 2016)
- Climate change (Hahn,
Reimsbach, & Schiemann
2015; Pinkse &
Gasbarro,2 016)
- Climate risks
(Kolk & Pinkse, 2005)
- Sustainable energy
(Kondoh, 2009)
- Eco-certication
(Melo & Wolf, 2005)
- Toledo water supply
and Lake Erie
phosphorus bloom
(Whiteman &
Kennedy, 2016)

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corporate governance structures (Thistlethwaite, 2012; Thistlethwaite & Wood, 2087).
Despite a relatively late recognition of the need for corporate sustainability research to
focus on climate change (Goodall, 2008), there is now a good understanding of driv-
ers of carbon reporting and lobbying, clear knowledge of institutional drivers of carbon
accounting regimes, evidence of nancial risks for a rm from climate change (Hahn
etal., 2015), and a growing understanding of the physical risks from climate change
such as those from extreme weather (Linnenluecke & Griths, 2013; Weinhofer &
Busch,2013). There is also continuing research focus on managing the risks from natural
disasters or extreme weather events – res, oods, drought – both in terms of supply chain
risk and response (Linnenluecke & Griths, 2013) and philanthropic disaster response
(Muller & Whiteman, 2009). In addition, the organizational adaptation literature has fo-
cused on building organizational resilience in the face of changing climate conditions
(Linnenluecke& Griths, 2010; Williams, T. A. et al.,2017). Collectively, these studies
provide new insights into risk management, noting that organizations can build resilience
and adaptive capacity by creating network responses and sensemaking capabilities and en-
couraging exibility (Linnenluecke & Griths, 2013).
Research also shows that risk perception is an important factor in determining a rm’s se-
lective attention to climate change risks; however, rms tend to focus on short-term risks that
are of immediate concern for business decisions (Pinkse & Gasbarro, 2016). A temporal bias
thus prevents rms from considering risks that will materialize in the distant future (Pinkse &
Gasbarro, 2016). Managers tend to overlook risks when the temporal and spatial attributes, or
scale of the processes related to the risk being observed, are not aligned with their cognition
(Bansal, Kim, & Wood, 2017). Corporations that operate in more dynamic and competitive
environments are more likely to implement adaptation strategies in the face of climate risks
(Berkhout, Hertin, & Gann 2006). Companies that perceive long-term organizational sur-
vival is threatened by climate change are more likely to invest in risky environmental tech-
nologies to enhance organizational resilience (Kolk & Pinkse, 2008). Climate change may
jeopardize long-term organizational survival. Nuclear power reduces carbon dioxide emis-
sions but increases the nuclear threats such as exposure to radioactivity creating a risk tradeo
(Kondoh, 2009). In addition, if nuclear waste storage zones are in geographic areas which may
be aected by rising sea levels or extreme weather, then new risks may arise.
To date, there is little crossover between the corporate sustainability literature and the or-
ganizational literature on risk and crisis management, which implicitly assume a stable natural
environment (cf. Gephart et al., 2009; Bundy et al., 2017). Overall, most studies are rm- and
industry-focused, and few, if any, attempt to analyze cumulative, interrelated systemic risks
at global, regional, and local levels over time (Whiteman et al., 2013. Integrative frameworks
of organizational crisis and risk implicitly assume a stable (and therefore invisible) natural
environment, which is not identied as an explicit variable or dynamic context shaping risk
(Bundy et al., 2017). Firms’ individual and collective actions also contribute signicantly
to global warming and other planetary boundaries, and co-create the threats that increase
risks to their operations and nancial stability. In the next section, we propose an integrative
framework (Figure 13.3) to help organizational scholars examine feedback loops across orga-
nizations and between social-ecological systems.
A Framework for Analyzing Systemic Planetary Risks
The outstanding question for organizational scholars is how can we contribute to the con-
versation about systemic planetary risks? The answer, from our perspective, is threefold:

Gail Whiteman and Amanda Williams
218
we can incorporate planetary risk into our view of organizational risk; second, we can help
organizations make sense of planetary risks; and third, we can identify how managers can
build more adaptive capacity through systemic risk management programs across scale, and
across organizational actors. To do so, we oer a framework (summarized in Figure 13.2)
which consists of three iterative phases (1) building a planetary view of organizational risk
across temporal and spatial scales, (2) making sense of organizational actions in the context
of planetary risks, and (3) building adaptive capacity to mitigate planetary risks.
Phase 1: Building a Planetary View of Organizational Risk across
Temporal and Spatial Scales
Risks from climate change, lack of fresh water, land use pressures, air pollution (aerosol
loading), ocean acidication, and chemical pollution (or more broadly, the release of
hazardous entities) pose signicant material risks to companies and societies – and critically
can be tied back to economic activity across companies and organizations over temporal
and spatial scales (Steen et al., 2015a; Clift et al., 2017). Planetary risks are systemic in
nature and need to be examined at local, regional, and global levels (Steen et al., 2015a;
Whiteman et al., 2013).
We therefore suggest that risk management decisions today need to be inuenced by an
understanding of these ecosystem risks which are interconnected at global, regional, and
local scales overtime. Figure 13.3 depicts safe and unsafe risk pathways in relation to plane-
tary boundaries, shows trends in global, regional, and local risks over time, and provides the
background for the discussion that follows.
Companies should take a long-term perspective to evaluate which risks could materialize
at dierent time scales, and assess both the materiality of those risks to rm operations, and
unintended externalities that arise from organizational actions which may amplify planetary
risks. Integrating the planetary boundaries framework to risk management ensures that a
more systemic approach is adopted which incorporates cross-organizational, cumulative or-
ganizational actions. This also reects the growing systemic perspective of global economic
actors, such as the World Economic Forum which argues that “[a] key characteristic of global
risks is their potential systemic nature – they have the potential to aect an entire system, as
opposed to individual parts and components” (WEF, 2014).
Phase 1
Building a planetary
view of organizational
risk across space and
time
Phase 2
Making sense of
planetary risk and
cross -organizational
actions
Phase 3
Building adaptive
capacity for managing
planetary risks
Increases recognition of
subtle and abrupt ecosystem
dynamics
Reduces vulnerability
to future shocks
Figure 13.2 A Framework for Analyzing Systemic Planetary Risks

Systemic Planetary Risks
219
The planetary boundaries framework (Figure 13.1) outlines the nine key ecosystem
processes which collectively delineate the safe space for humanity. By incorporating this
framework into our discipline, a key implication is to explicitly consider how organiza-
tional actions contribute (or detract) from pathways which may (or may not) lead to a safe
space for humanity (Rockström et al., 2009a, 2009b, 2013; Whiteman et.al, 2013); Steen
etal.,2015a). Safe pathways are those that mitigate planetary risks. Unsafe pathways are those
that (intentionally or unintentionally) amplify planetary risks.
A systemic perspective requires a cross-organizational collective view of planetary risks
over both time and space. Issues of scale are important when managers identify risks (Bansal
et al., 2017). We discuss these in more detail in the following section.
Temporal Scales
Temporal scale is “the patterned variations in processes over time” (Bansal et al., 2017,
p. 12). Long-term organizational survival depends on managers capacity to manage
intertemporal tradeos (Bansal & DesJardine, 2014). Inability to manage short-term
and long-term risks exposes the rm to risks across scales (Bansal & DesJardine, 2014).
Figure13.3 adopts a ten-year time interval (up to 2050) given that global societal and
economic risks have been dened as “an occurrence that causes signicant negative im-
pact for several countries and industries over a time frame of up to 10 years” (WEF, 2014).
In Figure13.3, we have suggested time intervals including 2020, 2030, 2040, and 2050.
Most of these intervals have coincided with existing globally agreed-upon frameworks
and scientic targets. The year 2020 has been proposed as the turning point for bending
the global emissions curve in order to achieve the climate targets set by the Paris Agree-
ment (Figueres et al., 2017). In addition, the UN Sustainable Development Goals (SDGs),
agreed upon by 193 member states of the UN, set the global development agenda until
2030. The 17 SDGs and 169targets set broad social and environmental goals. If seriously
implemented by governments, regulations and investment ows are expected to align
with the SDGs. To account for future risks and opportunities, managers should map
their current operations against the SDGs and align their strategy with the SDGs. The
SDG Compass, a guide for business action on the SDGs, provides advice for companies
to understand the impacts of the SDGs (GRI, UNGC, & WBCSD, 2015). The guide
suggests identifying high-impact areas and then evaluating the risks and opportunities
that the prioritized areas present. The guide also identies specic open-access tools and
indicators for each SDG that can be useful during the process. By 2050, climate scientists
agree that net zero emissions should be reached (Rockström et al., 2017).
Figure 13.3 Cross-organizational View of Long-term Planetary Risks over Time and Space

Gail Whiteman and Amanda Williams
220
Our framework explicitly identies these four intervals given the need for rm behavior to
collectively be aligned with global agreements and scientic thresholds to mitigate long-term
social-ecological risks. Managers can, in collaboration with scientists, further identify and re-
ne time intervals such that they are most pertinent and relevant for rm-specic operations.
Nevertheless, the collective systemic targets and time frames remain relevant for each rm
as it operates within the collective behaviors of multiple rms and societies. In order to ef-
fectively and robustly evaluate future risks to and from the natural environment, managers
should also account for cross-scale feedbacks over time. For example, infrastructure decisions
made by countries, cities, and companies cannot be assessed without a systemic appreciation
of risks from the natural environment. There are some encouraging signs that this approach
is being applied in cities like London, which are evaluating green infrastructure decisions
on transport, water, and energy to both accommodate a growing population and make the
city more resilient to the eects of climate change. In general, our framework suggests that
organizational decisions made today will positively and negatively impact social-ecological
systems over time and across dierent geographic scales. If the feedback from these decisions
is not accounted for today, organizations will be left vulnerable to unexpected future shocks.
Spatial Scales
Achieving sustainability requires addressing interactions across spatial scales (Starik &
Ra nd s, 1995). Spatial scale is “the geographical area in which the dominant process(es) of interest
manifest” (Bansal et al. 2017, p. 12). In Figure 13.3, we have identied a number of organizational
risks that materialize at global, regional, and local spatial scales related to the planetary boundaries
processes. In order to do so, we build upon prior transdisciplinary work that considers the spatial
implications of planetary risks to organizational behavior (Whiteman et al., 2013).
Using a spatial application of the planetary boundaries concept to organizations in the natural
environment, Whiteman et al. (2013, p. 324) show that “corporate sustainability is anchored
within an analysis of how the company (and industry at a higher scale) aects all nine boundary
processes within specic bounded geographies – at the local, regional, continental, and planetary
level.” One empirical example of this type of approach is an organizational analysis of cumulative
cross-scale risks from phosphorus overload in Lake Erie (Whiteman & Kennedy, 2016). This
study used the Lake Erie water system as the focal unit of analysis rather than starting with
specic organizational actors (e.g., farmers or agricultural companies). A spatial and temporal
analysis necessitates a broader investigation of the biophysical processes surrounding Lake Erie
as well as the collective and cumulative actions of multiple actors shaping the agricultural sector
(e.g., regulators, seed manufacturers, farmers, fertilizer manufacturers, retailers, transportation),
as well as those from shipping, recreation, retail, and water management.
Figure 13.3 provides examples of risks that may arise at dierent spatial scales includ-
ing global, regional, and local (summarized on the right side of Figure 13.3). Thus, cross-
organizational actions must simultaneously consider spatial and temporal scales across social,
ecological, economic, and organizational subsystems. A processual view collapses the notion
that “crisis” can be avoided, but rather it is part of a complex process unfolding with risks to
be limited or contained (Whiteman & Kennedy, 2016, Williams, T. A. et al., 2017).
Phase 2: Making Sense of Planetary Risk and Organizational Actions
Organizational studies indicate that knowledge and information about risks is import-
ant for framing and deciding upon courses of action (Sullivan-Taylor & Wilson, 2009).

Systemic Planetary Risks
221
Wheninformation is scarce, the level of risk and exposure to the risk increases (Sullivan-
Taylor & Wilson, 2009).
Encouragingly, “real-world” discussions of global risk have begun to make sense of plan-
etary risks. For example, each year, the World Economic Forum (WEF) issues an inuential
report on Global Risk. Based upon feedback from 750 global experts, WEF identies the top
risks facing world leaders, including the private sector (WEF, 2017). For much of its history,
the WEF Global Risk Report has short-listed risks from civil unrest, war, market turbu-
lence, and supply chain disruption. But in recent years, the global risk landscape changed,
and WEF’s reports (e.g., 2017) recognize the natural environment and extreme weather
as the source of the top risk to humankind – the threat of climate change was ranked as
the #1 risk facing the world because of both the growing likelihood of this occurring and
the increasing scope of the potential impacts. “Research indicates that unbridled anthropo-
genic climate change would be most likely to play out in a disruptive and irreparable way”
(Schellnhuber, Rahmstorf, & Winkelmann, 2016, p. 650). WEF actively supports work on
other planetary risks like water, and has convened numerous workshops on the implications
of planetary boundaries for various sectors, nations, and within various types of organiza-
tions (Rockström, personal communication).
Economic discussions of planetary risks are also a topic within the corporate boardroom.
Unilever, for instance, has explicitly considered planetary boundaries risks to and from their
value chain (Clift et al., 2017). Planetary boundary processes such as climate change, fresh
water use, and nitrogen and phosphorus ows pose signicant risks to food security at local
and regional scales.
At the same time, such discussions remain more well developed on single-topic issues
such as ozone depletion or the climate change front. For instance, Mark Carney, Governor
of the Bank of England and Chair of the G-20 Financial Stability Board, argues that cli-
mate change poses physical, liability, and transition risks to markets and rms (Carney,
2016,pp. 2–4). More work is required to integrate the systemic nature of planetary risk into
these arenas and to more eectively make sense of complex feedbacks across dierent spatial
and temporal scales. Weinhofer and Busch (2012) suggest, for instance, that future research
should examine a two-dimensional risk perspective on climate change including both an
“inside-out” perspective which acknowledges the rm’s contributions to climate change
and an “outside-in” perspective which acknowledges the impact of climate risks on the rm.
However, they do not discuss the interaction of inter-related risks over time.
We also know that risk sensemaking is critical to understanding the threat of high-risk
technologies to the natural environment (Gephart, 2004). In general, organizational sen-
semaking contributes to eective crisis and risk management by helping organizational
actors identify and develop a shared understanding and set of responses to emerging risks
(cf. Williams, T. A. et al., 2017). But research on ecological sensemaking further suggests
that ecological crises occur when individuals – and by extension, organizations – are disem-
bedded from the natural environment (Whiteman & Cooper, 2000). “To the unseasoned,
the dynamics of nature may appear as undierentiated ux, but to the more experienced, this
ecological ux contains important raw data that can signal danger” (Whiteman & Cooper,
2011, p. 891). Ecological sensemaking is “the process by which actors identify and make
sense of complex ecological systems that unfold over space and time” (p. 890). Proponents
of ecological sensemaking “explicitly recognize that the natural environment consists of
material and physical elements” (p. 889) and the ability to make sense of subtle and abrupt
ecosystemic dynamics across time and space can enhance organizational resilience at both
the individual and collective levels: “if local actors are not routinely engaging in ecological

Gail Whiteman and Amanda Williams
222
sensemaking, and/or this expertise is not eectively transferred ‘across scale,’ hidden vulner-
ability can escalate into crisis” (p. 908).
Here we argue that cross-organizational sensemaking of planetary risks can be facilitated
by combining local data on ecosystem change, and by using science-based boundary objects
to formulate a collective strategy to address pressing global environmental issues. Framing
of global systemic risks may also be an avenue for organizational scholars to pursue. Bundy
et al. (2017, p. 11), for instance, show that “leaders who frame crises as threats react more
emotionally and are more limited in their eorts, while leaders who frame crises as oppor-
tunities are more open-minded and exible.”
Phase 3: Building Adaptive Capacity for Managing Planetary Risks
We explained how organizational risks in our complex planetary system can be understood,
and we now suggest how managers could collectively build adaptive capacity to cope with
long-term systemic risks.
When levels of uncertainty are high and information is scarce, management techniques
which emphasize prediction and planning are insucient (Sullivan-Taylor & Wilson,2009).
In order to cope with systemic long-term risks arising from transgressed planetary bound-
aries, managers can build long-term adaptive capacity to systemic ecosystem risks. A key
implication of Figure 13.3 is for organization scholars to consider the interrelated risks of
other social-ecological systems, such as biodiversity, nitrogen/phosphorus use, and ozone
depletion on organizational adaptation strategies (Whiteman et al., 2013), over time
(Bansal& DesJardine, 2014). An example of this approach to organizational studies of risk is
found in Whiteman and Kennedy (2016) in their systemic analysis of the phosphorus threat
facing the city of Toledo, Ohio.
The adaptive capacity of organizations within nested social-ecological systems is one of
the key mechanisms to managing planetary risks. Adaptability is “the capacity of actors in a
system to inuence resilience” (Folke et al., 2010, p. 3), in order to “avoid crossing into an
undesirable system regime, or to succeed in crossing into a desirable one” (Walker& Salt,
2006, p. 163). To respond eectively to systemic shocks arising from increasing volatility of
the planetary system, organizations can build exible and adaptive systems. Self-organizing
systems tend to be highly adaptive. Heightened sensemaking of ecological risks may initiate
organizational adaptation strategies to build the required resilience (Clément & Rivera, 2016).
For instance, studies have shown that considering how to manage risks posed by climate
change, mitigation can improve long-term resilience capabilities (Beermann,2011). Yet
adaptive capacity to climate change cannot be developed in isolation from other planetary
boundaries. For example, land degradation, another planetary boundary, is aected by cli-
mate change. For example, a forest re contributes to climate change by releasing carbon
stored in the trees that are burned and leaves fewer trees for carbon storage in remain-
ing woodlands. Such risks are intrinsically intertwined, and adaptive capacity is a cross-
organizational and systemic phenomenon.
After an understanding of the planetary system is developed, managers may build adap-
tive or transformative capacity to cope with long-term risks. For example, managers of
high-reliability organizations (HROs), or organizations in high-risks industries which never
fail, build adaptive capacity for organizational resilience (Weick & Sutclie, 2001).
Research also suggests that the resilience of ecosystem services is enhanced when gover-
nance systems encourage learning and experimentation, foster an understanding of complex
systems, promote participation, and implement polycentric governance (Biggs et al., 2012).

Systemic Planetary Risks
223
Managers can thus encourage diversity and redundancy as well as manage feedbacks and
connectivity to enhance the resilience of ecosystem services (Biggs et al., 2012; Winn &
Pogutz, 2013). More resilience is not necessarily better. Often systems that are too resilient
become rigid and unable to undertake necessary change until it is too late (Walker, Holling,
Carpenter, & Kinzig, 2004). When adaptation limits are reached, transformative change may
be necessary (Walker et al., 2004; Clément & Rivera, 2016), which may, in turn, require the
reduction in resilience within the old system. Resilience of existing structures and behaviors
must be reduced in order to introduce new variables into the system to allow for transforma-
tive change (Walker & Salt, 2004). (Ecological) transformability is “the capacity to create a
fundamentally new system when ecological, economic or social structures make the existing
system untenable” (Walker et al., 2004). Organizations, including companies, have import-
ant roles to play within the transformation of market systems through eco- innovation and
novelty (Loorbach, van Bakel, Whiteman, & Rotmans, 2010; Kennedy, Whiteman, & van
den Ende, 2017).
Given the spatial scale of global risks (see Figure 13.3), we suggest organizations need to
build adaptive or transformative capacity collectively. For example, research on recovery
operations after New Zealand earthquakes nds that organizations embedded in strong net-
works are able to better organize after a disaster (Stevenson et al., 2014). If connectedness is
low in networks of organizations, vulnerabilities to global risks may increase. Some network
structures could be more vulnerable when a node is removed compared to others (van der
Vegt, Essens, Wahlström, & George, 2015). Research on resilience in organizational net-
works would be particularly relevant for supply chains, where organizational connectedness
is high. More knowledge is needed to understand cross-organizational resilience, adaptation,
and transformation as responses to long-term global systemic risks.
Organizational scholars should also examine how cross-organizational governance structures
inuence responses to global systemic risks. Governance and compensation structure may
inuence the probability of a crisis (Bundy et al., 2017). Companies that wish to avert possible
climate change risks may rely on changes in compensatory benets (Kolk& Pinkse, 2005).
Although research has yet to explore the impact of tying compensation structures to global
risks or to assess the subsequent impacts on organizational resilience, the structure of corporate
boards may need to be revised to include a role for chief climate ocers or a planetary risk
committee.
Conclusion
We proposed in this chapter that organizational studies of risk can benet from the wealth
of natural science insights on systemic ecosystem risks at the planetary scale. Hoskisson,
Chirico, Zyung, and Gambeta (2017, p. 156) posit that the dominant organizational theories
such as agency theory or the behavioral theory of the rm that are used to understand man-
agerial risk-taking tend to focus on solely risks that are economic or nancial in nature. The
authors argue that the boundary conditions of risk theories should therefore be reconsidered.
Alternative theories are needed to redene risk-taking and consider risks beyond rm-level
nancial risks (Hoskisson et al., 2017). This chapter has contributed to the advancement of
the literature on organizational risk by a long-term, systemic perspective on planetary risks
that recognizes the embeddedness of organizations in the natural environment.
Further, given the ongoing escalation of planetary risks related to key ecosystem processes,
we proposed a three-phase framework for analyzing systemic planetary risks (Figure 13.2)
that can contribute to reduction of these risks by establishing ways for organizations to build

Gail Whiteman and Amanda Williams
224
a planetary view of organizational risk across temporal and spatial scales, make sense of or-
ganizational actions in the context of planetary risks, and build adaptive capacity to mitigate
planetary risks.
Critically, our framework highlights the importance of making managerial decisions as soon
as possible to take into consideration safe pathways within the boundaries of the planet (Steen
et al., 2015a). To manage the long-term systemic risks of organizations, we suggest principles of
adaptive capacity and resilience can prepare managers for unanticipated risks from the natural
environment and enhance managers collectively ability to respond to long-term planetary risks
driven by feedback loops across local, regional, and global scales. One example is Action 2020,
the collective strategy of the World Business Council for Sustainable Development, which
utilized the planetary boundaries framework to develop science-based targets for collective
business action in an eort to mitigate systemic risks from the natural environment.
We have also suggested several areas of research including sensemaking, organizational
networks, and governance in the discussion that organizational scholars can undertake to
contribute to a better understanding of planetary risks.
We also note that our framework has limitations. In particular, we pay little attention
to social risks in our framework (Leach, Raworth, & Rockström, 2013). However, we
recognize that planetary environmental risks are deeply intertwined with pressing socie-
tal issues, and the interaction between these systems needs greater exploration in terms of
cross- organizational behaviors. In addition, future empirical research is needed to explore
barriers and enablers to our collective framework, including a deeper analysis of the role
of entrenched vested interests and power relations. Future research on bounded rationality
in managerial risk perceptions across scales is required, especially given that prior research
indicates that “risk perception in an important factor in determining a rm’s selective at-
tention to climate change risks; however, rms tend to focus on short-term risks that are of
immediate concern for business decisions” (Pinkse & Gasbarro, 2016).
We thus encourage organizational scholars to research long-term systemic risks that have
yet to receive scholarly attention. For example, the WEF’s The Global Risks Report 2017
found that social instability, migration, and water crises are the most critical societal risks for
businesses in 2017 (WEF, 2017). Amongst the top environmental risks are biodiversity loss
and ecosystem collapse. However, our review of the literature shows that these risks have
received little attention. We urge organizational scholars to devote more attention to these
pressing global risks.
Finally, we argue that a cross-organizational and transdisciplinary approach is necessary–
organization scholars cannot eectively address planetary risks to and from organizations
without collaborating with our natura l science colleagues. We thus reiterate the long- standing
call in sustainability research for greater transdisciplinary integration and closer collaboration
between social scientists and natural scientists to help to ll these gaps. While it may be true
that past societies have been surprised by catastrophic environmental risks, we argue that a
transdisciplinary approach to organizational risk can help us learn from the mistakes of the
past and collectively contribute to a safe space for humanity. There is no time to lose.
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