Scott Randall’s focus on the importance of anticipating the demands of “stakeholders”, as they have become known, is interesting. It certainly is true that a company can be badly hurt both by government regulation and by a sudden shift in public sentiment. Most observers would agree that good corporate citizenship is important to long-term profitability.

A company that becomes widely regarded as a pariah will have difficulty on many fronts. In some cases a company has so much market power that it can ignore such pressure in the short run but it is set up for a fall as soon as alternatives arise. Even in the energy space, most communities have some alternative sources of supply and consumers can still vote with their feet. Aggregate demand is inelastic but that doesn’t mean that local demand is equally insensitive to price or to corporate reputation.

Clearly a process that assures early recognition of, and response to, emerging public issues is valuable. The recently growing public focus on sustainability is one example. That said, such issues are so broad and varied that it is hard to know where analysis of them should stop. Demands for corporations to make the world perfect are ultimately inexhaustible because, sad to say, the world falls so far short of perfection. Nevertheless, making early recognition of such demands a key goal of a company’s risk information infrastructure strikes me as a sensible priority.