Many businesses have not planned for a response to significant modern day challenges, such as the current water restrictions in parts of the country, proving that businesses are often not resilient to change.

To tackle this challenge, the Council for Scientific and Industrial Research (CSIR) and advisory firm PwC have developed seven principles aimed at embedding a resilience approach in business strategy, management and reporting.

The seven principles: systems; risk and adaptation; decoupling; restoration; wellbeing; collaborative governance; and innovation and foresight, ensure that a business is better equipped to continue operating and creating value in the short and long term, respond to opportunities arising from change, and anticipate, identify and adapt to change.

These are imperative in planning for modern day challenges facing business today and in the future.

“When the system of a business is resilient, it simply means that the system has enough social ecological elements to resist a shock,” CSIR sustainability expert Dr Lorren Haywood said, explaining that businesses needed to understand and plan for the depletion of natural resources and shift from being sustainable to being adaptive.

Some of the global challenges facing businesses include climate change, the instability of markets, energy and resource constraints, poverty and conflict.

“With new and emerging risks on the horizon, it is imperative for organisations to be resilient, thereby, enabling an adaptive and responsive business environment to global change and emerging risks,” said Haywood.

Scientists have already concluded that four out of the nine 'boundaries' that make Earth a stable and safe place to live, have been crossed owing to human activity.

These include climate change, the loss of biosphere integrity through species extinction, and the loss of genetic and functional diversity, land-system change and biochemical flows passing beyond safe levels.

“The more a social ecological system’s resilience is compromised through approaching critical thresholds, the less able it is to support thriving businesses,” Haywood pointed out.

To respond effectively, the team has found, businesses need to build and maintain resilient social ecological systems as part of their integrated management, which would enable them to withstand, adapt and recover from shocks. Inadequate preparedness to respond to the current water restrictions is an indication of system vulnerability.

The principles were developed in a series of workshops with a multidisciplinary team comprising specialists from various backgrounds. Interviews were also conducted with ten companies from a range of different industries considered leaders in terms of integrated reporting.

The principles are underpinned by the goal of sustainable development and their application is enabled by a series of worksheets which allow businesses to assess the extent to which they are currently addressing resilience.