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How to Identify and Manage Emerging Risks?
- Julien Haye
- Feb 12, 2024
- 23 min read
Updated: 6 hours ago
Introduction: Why Emerging Risks Deserve Board-Level Attention
What are the top five emerging forces that could reshape your organisation’s future?
For many leaders, the most difficult challenges are not the risks that can be modelled and measured. In a recent LinkedIn poll of 100+ professionals, only 7% pointed to quantifiable risks as their toughest issue. The vast majority highlighted strategic uncertainty (34%), cultural blind spots (33%), and emerging risks (27%) as the real test of resilience. These findings underline a growing truth: what disrupts organisations most is not what they know, but what they fail to anticipate.
History offers stark reminders. Kodak once dominated photography yet failed to act on the very digital technology it had pioneered. Nokia led the global mobile phone market but underestimated the impact of smartphones. Both were blindsided not by what they could measure, but by signals they dismissed as noise. Today, the same risk exists with AI adoption, climate shifts, and evolving regulations: organisations that fail to adapt quickly risk being overtaken by more agile competitors.
Emerging risks — from disruptive technologies and sudden regulatory shifts to geopolitical shocks and cultural transformations — cannot be managed with traditional frameworks alone. They require adaptability, foresight, and cultures where challenge and weak signals are surfaced early. Yet few organisations are equipped to deal with this reality. Too often, risk functions focus on today’s metrics while blind spots accumulate across leadership and culture. The result is organisations that are efficient in the short term but fragile in the long run.
At Aevitium LTD, we believe that recognising and preparing for these risks is no longer optional. This guide sets out a structured, systematic approach for identifying and managing emerging risks, supported by a risk-aware culture that turns uncertainty into a source of resilience and innovation. By applying the principles outlined here, your organisation can anticipate disruption, embed adaptability into governance, and build a sustainable edge in an environment where agility defines survival.
Table of content:
Executive Summary
Emerging risks, characterised by their novelty and unpredictability, arise from a multitude of sources including technological breakthroughs, regulatory shifts, environmental changes, and geopolitical dynamics. Traditional risk management methodologies, while foundational, are increasingly inadequate in addressing the complexities and velocities of these risks.
This article presents a detailed guide on designing an emerging risk framework supported by a fully embedded risk aware culture. Such framework is a critical tool for organisations aiming to navigate the uncertainties of the modern business landscape effectively. It underscores the necessity of such a framework, detailing a step-by-step approach for its effective implementation. From securing executive buy-in and establishing leadership to integrating the framework into organisational processes and continuously improving it, the guide provides actionable insights and practical strategies.
Moreover, through a series of illustrative case studies, the article showcases successful implementations across various industries, demonstrating the tangible benefits of adopting a proactive and structured approach to emerging risk management. These examples highlight how organisations can not only mitigate potential threats but also seize opportunities for innovation and strategic growth.
The need for an emerging risk framework is underscored by a critical observation: many organisations exhibit varying levels of maturity in identifying and managing those new inherent risks, often underestimating their potential impact. This guide aims to bridge this gap, offering ambitious yet targeted solutions that drive value creation, optimise risk resources especially through effective horizon scanning , and foster a culture of effective risk-taking.
In essence, this article serves as an indispensable blueprint for leaders dedicated to steering their organisations towards resilience and success in an uncertain world. It encourages readers to take a proactive stance on emerging risks, engaging with a wide range of stakeholders to gather diverse perspectives and insights, thereby enhancing their preparedness and strategic agility.
For organisations ready to elevate their risk management capabilities, this guide offers a comprehensive pathway to developing and implementing such risk framework, positioning them to confidently face the challenges and opportunities of the 21st century.
It is not always easy to develop such tool without support. Aevitium LTD's structured risk advisory and consulting services can provide you with a robust support system to develop a risk strategy and emerging risk framework designed for you. We promote ownership of risk decisions and foster risk-aware culture through the tailored solutions we develop together.
Strategic alignment connects risk oversight with decision-making at every level. When boards and CROs embed this discipline, they strengthen resilience, protect value, and build long-term trust.
👉 Ready to review your organisation’s strategic alignment?
Why do you Need an Emerging Risk Framework?
Navigating uncertainty without a clear approach is like sailing through uncharted waters without a compass. An emerging risk framework provides the structure to identify, assess, and manage new forms of risk with consistency. It enables teams to anticipate shifts early, align responses, and integrate foresight into planning and decision cycles.
A structured approach also supports innovation and strengthens resilience. It positions the organisation to adapt with purpose and to use change as a source of advantage. Leaders gain a forward-looking view of how external trends influence priorities, customer expectations, and the organisation’s operating model. This perspective informs choices on capital deployment, technology investments, organisational design, and transformation planning. It also encourages leadership teams to review ambition and appetite as new signals appear, which sustains agility during periods of change. This forms the basis of anti-fragile risk management, where organisations use disruption to refine assumptions, improve decisions, and enhance long-term resilience.
Here's a breakdown of the key reasons for having such a framework:
Systematic Identification of Risks
Identifying emerging risks involves having a structured process to detect and recognise new risks that could impact the organisation, leveraging horizon scanning for this purpose. In the absence of a systematic approach, emerging risks might go unnoticed until they have already caused significant damage. A framework ensures that risks are identified early, giving organisations more time to prepare and respond.
Comprehensive Risk Assessment
Once risks are identified, assessing them involves evaluating their potential impact on the organisation and the likelihood of their occurrence. Not all risks pose the same level of threat. A comprehensive assessment helps prioritise risks based on their severity, ensuring that resources are allocated efficiently to address the most critical issues first.
Strategic Response and Mitigation
It is then necessary to develop strategies to address, mitigate, or capitalise on identified risks. A proactive stance enables organisations to not just defend against potential threats but also to turn some risks into opportunities for growth or competitive advantage.
Staying Ahead of the Curve
Such framework will help your organisation to anticipate changes in the market, technology, regulations, and other external factors that could present new risks. By anticipating such changes, you can adapt their strategies and operations in advance, maintaining a competitive edge and avoiding the scramble to catch up with market’s shifts.
Fostering Innovation
It encourages a culture of innovation in response to emerging risks, exploring new business models, products, or services. Addressing emerging risks often requires creative thinking and innovative solutions. A framework that incorporates innovation can help organisations not only navigate risks but also discover new avenues for growth.
Enhancing Organisational Resilience
It helps you to build the financial and organisational capacity to withstand and recover from adverse situations caused by emerging risks. Such resilience ensures that an organisation can continue operations and preserve value in the face of unforeseen challenges, safeguarding its long-term sustainability.
Securing Competitive Advantage
Finally, you can leverage risk management as a strategic tool to outperform competitors. In industries where risks are rapidly evolving, the ability to manage them effectively can differentiate an organisation in the marketplace, attracting customers and investors who value foresight and stability.
Case Studies of Successful Implementation
Financial Services – Cybersecurity Risk
Situation: A leading global bank identified the emerging risk of cyber-threats, that is threats to its online information and systems, particularly as digital banking services expanded. Recognising the potential for significant financial and reputational damage, the bank sought to proactively address this challenge.
Action: The bank implemented a comprehensive cybersecurity risk framework that included advanced threat detection systems, regular security assessments, and employee training programs on cybersecurity best practices. They also established a rapid response team to address any security breaches immediately.
Outcome: By prioritising cybersecurity, the bank not only protected its assets and customer data but also strengthened customer trust in its digital services. This proactive stance allowed it to outperform competitors in digital banking security and resilience.
Retail - E-Commerce and Supply Chain Disruption
Situation: An international retail chain faced emerging risks from the rapid growth of e-commerce, that is the online storefronts for their competitors, and potential supply chain disruptions due to geopolitical tensions and natural disasters.
Action: The retailer developed an Emerging Risk Framework that included diversifying its supplier base to include more local options, investing in e-commerce platforms, and implementing advanced analytics to predict and manage supply chain risks.
Outcome: This strategic approach allowed the retailer to adapt quickly to market’s changes, ensuring product availability online and in-store, even when competitors faced shortages. The retailer's robust e-commerce platform also captured a larger market’s share as consumer shopping behaviours shifted online.
Healthcare - Tele-health Adoption
Situation: A healthcare provider identified the emerging risk and opportunity presented by tele-health technologies, especially in the context of increasing demand for remote healthcare services. For background, this refers to the use of digital tools and communication technologies for healthcare services. It's like having a doctor's visit over a video call, enabling patients to receive medical advice, diagnoses, or even prescriptions without physically going to a clinic.
Action: The provider implemented a tele-health risk management framework that addressed regulatory compliance, patient privacy, and technology infrastructure. It involved training for healthcare professionals on delivering care remotely and investing in secure telehealth platforms.
Outcome: The adoption of tele-health services expanded the provider's reach, offering patients convenient access to care while ensuring compliance with health regulations and patient privacy laws. This strategic move enhanced patient satisfaction and positioned the provider as a leader in innovative healthcare solutions.
Energy Sector - Transition to Renewables
Situation: An energy company recognised the emerging risk of regulatory changes and market’s shifts towards renewable energy sources, threatening its traditional fossil fuel-based business model.
Action: The company developed a risk framework to manage the transition, investing in renewable energy projects, such as solar and wind, and researching into energy storage solutions. It also engaged with stakeholders, including governments and communities, to support sustainable energy initiatives.
Outcome: These strategic investments allowed the company to diversify its energy portfolio, reduce regulatory risks, and tap into new markets for renewable energy. By embracing the shift towards sustainability, the company not only mitigated potential risks but also established itself as a leader in the transition to clean energy.
What is it?
Emerging risks are new or changing threats that cause a lot of unpredictability and could have a big effect on many areas, like operations, technology, the environment, the economy, society, rules, and regulations. Cybersecurity threats, AI and IoT flaws, climate change, biodiversity loss, economic instability, social inequality, geopolitical tensions, pandemics, data privacy issues, supply chain disruptions, and technology failures are some of these risks. By there very nature, emerging risks are complicated and hard to predict.
Here is an analytical breakdown of their fundamental components:
Sources
Technological Innovations: This refers to the latest advancements in technology that transform the way we live, work, and interact. For example, artificial intelligence (AI) is a technological innovation that can automate tasks previously done by humans, offering both opportunities for efficiency and challenges in job displacement and data security.
Regulatory Developments: These are changes or new introductions in laws and regulations that organisations must comply with. An example of regulatory development is the introduction of stricter data protection laws that require businesses to safeguard the personal information of their customers more rigorously.
Geopolitical Dynamics: This term refers to the way political actions and relationships between countries influence the global and local economic environment. For instance, a trade agreement between two countries might open new markets for businesses or, conversely, a trade war could impose tariffs that make it more expensive to import certain materials.
Attributes
Novelty: These risks often emerge recently, evolving in ways that are not yet fully comprehended, rendering historical data less predictive.
Complexity: They may exhibit complex interrelations between various factors, complicating their forecast and impact assessment.
Unpredictability: Given their novel and intricate nature, these risks defy easy anticipation through conventional risk management methodologies.
Management Strategies
Proactive Identification: Necessitates the anticipatory scanning of potential emerging risks, employing methodologies like scenario analysis and trend monitoring. Think of this as the act of looking into the future to spot potential problems before they happen. It's like checking the weather forecast before planning a picnic. If rain is predicted, you might decide to have the picnic indoors or on a different day. Similarly, by proactively identifying what could go wrong in your business operations, you can prepare better and avoid potential issues.
Evaluation: Involves the assessment of the potential impact and probability of occurrence of emerging risks through both qualitative and quantitative means, often amidst conditions of ambiguity. Once you've spotted potential risks, the next step is to figure out how serious they could be. This is akin to deciding how much trouble it would be if the picnic did get rained out. Would it just be a minor inconvenience, or could it ruin a major event? In business terms, evaluating risks helps you understand which ones need immediate action and which ones can be monitored over time.
Flexibility: Requires the implementation of versatile strategies that can be adjusted as additional information about the emerging risk becomes accessible, encompassing risk mitigation, adaptation, and the exploration of emerging opportunities. Having the ability to change your plans quickly in response to new information is crucial. If you learn the morning of your picnic that there's a 100% chance of heavy rain, you might decide to cancel or move it indoors. Flexibility in managing risks means being ready to adjust your strategies as new threats emerge or as existing ones evolve. This could mean changing a project's direction, reallocating resources, or adopting new technologies to mitigate risks effectively.
Emerging risks pose a challenge to traditional risk management frameworks due to their inherent uncertainty and complexity. Nonetheless, by delineating their fundamental components and adopting a proactive, flexible management approach, organisations can enhance their preparedness for these uncertainties. This enables the transformation of potential challenges into strategic opportunities for innovation and competitive differentiation.
What are Emerging or Principal Risks?
Emerging and principal risks represent significant sources of uncertainty that can influence an organisation’s strategy, performance, and long-term resilience. Both categories carry the potential for substantial impact, although they differ in how visible, understood, or predictable they are.
Principal risks are the exposures that leadership teams already recognise as material. They are understood, monitored, and often supported by established controls, reporting routines, and risk appetite measures. They sit at the centre of board and executive oversight because their potential effect on objectives is already known.
Emerging risks are different. They are newly observed, evolving, or not yet fully understood. Their drivers may be unfamiliar and their effects may develop gradually before accelerating. These risks can originate from technology shifts, regulatory changes, geopolitical tension, social trends, or cultural and behavioural dynamics inside the organisation. They often begin as weak signals and become more visible as patterns form and evidence accumulates.
Both categories matter for leadership. Principal risks reflect the exposures that shape day-to-day governance and delivery. Emerging risks influence how strategy must adapt and how the organisation prepares for future conditions. Treating them together gives boards and executives a broader view of how uncertainty evolves and how the organisation can maintain direction, pace, and performance in a changing environment.
How to Identify Emerging Risks?
Identifying emerging risks is a cornerstone of proactive risk management. It requires structured horizon scanning to search the external environment for signals of change that could affect the organisation. Techniques such as environmental scanning, trend analysis, and scenario planning provide a broad view of shifts in technology, regulation, markets, and society. Engagement with stakeholders, including customers, employees, partners, regulators, and industry experts, adds insight on new challenges and opportunities that may not yet appear in formal data.
Emerging Risk Identification Roadmap
1. Set Focus and Ownership
Clarify strategic priorities and critical value drivers.
Define who owns emerging risk identification and escalation.
Agree on scope, frequency, and reporting expectations.
2. Scan the External Environment
Use horizon scanning to track political, economic, social, technology, legal, and environmental trends.
Combine structured sources such as reports and data with curated expert insights.
Capture early signals from regulators, industry bodies, and competitors.
3. Capture Internal Signals and Frontline Insight
Gather observations from business units, customer-facing teams, and support functions.
Build simple channels for reporting weak signals and near misses.
Include learning from incidents, audits, and thematic reviews.
4. Analyse Patterns and Cluster Themes
Group signals into themes such as technology, conduct, resilience, or culture.
Assess potential pathways from early signals to impact on strategy and operations.
Use workshops or cross-functional forums to test and refine themes.
5. Apply Structured Techniques
Use environmental scanning, scenario planning, and trend analysis to deepen understanding.
Explore “what if” pathways for each theme over different time horizons.
Document key assumptions and areas of uncertainty for later review.
6. Prioritise Emerging Risks
Assess potential impact, velocity, and level of uncertainty for each theme.
Rate exposure using simple criteria aligned to risk appetite and capacity.
Select a short list for detailed analysis and monitoring.
7. Prepare for Leadership Discussion
Translate technical insight into clear strategic narratives for boards and executives.
Highlight linkages to strategy, transformation, capital, and culture.
Propose next steps for monitoring, further analysis, or initial response planning.
Uncover potential emerging risks with our comprehensive Horizon Scanning Guide. Aevitium LTD's downloadable resource offers step-by-step instructions and best practices to enhance your organisation's risk identification process. Download it now!
How to Assess and Prioritise Emerging Risks?
Once potential emerging risks are identified, the next step is to assess their possible impact and determine which themes require leadership attention. This process combines informed judgement with structured analysis, especially when evidence remains limited or uncertain.
Impact, velocity, and level of uncertainty help build a first view of exposure. These criteria support early comparison with risk appetite, risk tolerance, and risk capacity. Simple tools such as heat maps, thematic assessments, or scenario-based scoring can help produce a consistent view across teams.
The goal is to focus leadership time on the themes with the greatest potential to influence strategy, performance, or resilience. A short list of priority emerging risks then forms the basis for deeper monitoring, analysis, and board-level discussion.
How to Mitigate them?
Mitigating emerging risks requires clear choices on how the organisation prepares for, reduces, or absorbs uncertainty. The response may involve preventing the risk, minimising exposure, transferring elements of it, or accepting the risk when impact is limited and well understood. These decisions work best when aligned with risk appetite, tolerance, and capacity, which define the level of uncertainty the organisation can sustain while delivering its strategy.
Mitigation also benefits from concise action plans for each priority theme. These plans outline next steps, decision owners, resource needs, and indicators to track. They support consistent action across teams and ensure that responses remain aligned with strategic objectives, performance expectations, and the organisation’s capacity to absorb risk.
Leaders play a central role in this process. They review appetite and tolerance levels as new information appears, which supports timely adjustments to direction or ambition. This dynamic approach reinforces resilience and ensures that mitigation remains appropriate as signals strengthen and conditions evolve.
Technology-driven emerging risks offer a clear example. Mitigation may combine established control measures with enhanced monitoring, automated detection, or scenario-based resilience testing. As tools and techniques advance, action plans evolve to maintain effectiveness and support long-term strategic goals.
When to Implement an Emerging Risk Framework?
Boards and executive teams gain the most value when emerging risk is reviewed at regular intervals rather than only during periods of disruption. Emerging risk review works well as a standing agenda item at board and committee level, aligned with the annual strategy cycle or major transformation milestones.
This timing supports informed debate, timely adjustment of priorities, and early integration of weak signals into planning, resource allocation, and appetite discussions. Aevitium’s annual Risk Mega-Trends review also provides a strong input for these discussions by highlighting external shifts that may influence the organisation’s future direction.
Here are key situations when implementing such a framework is particularly required:
Rapid Technological Advancements
When an organisation operates in or is entering sectors characterised by rapid technological changes, such as fintech, biotech, or digital services, the pace of innovation can introduce new risks that were previously unimagined.
Example: A leading automotive manufacturer designs an emerging risk framework to address risks associated with the transition to electric vehicles (EVs), including battery technology innovations and changing consumer preferences towards sustainable transportation.
Global Expansion
Organisations looking to expand their operations internationally may encounter unfamiliar regulatory environments, cultural differences, and geopolitical risks. An Emerging Risk Framework helps navigate these complexities.
Example: A retail chain uses an Emerging Risk Framework to navigate risks related to entering the Asian market, such as understanding local consumer behaviour, regulatory compliance, and managing potential supply chain disruptions due to geopolitical tensions.
Regulatory Changes
Industries subject to frequent or significant regulatory changes, such as healthcare, finance, and energy, require a proactive approach to manage the risks and opportunities arising from new legislation.
Example: A pharmaceutical company employs an Emerging Risk Framework to proactively manage risks associated with evolving global regulations on drug testing and approval processes, ensuring compliance and minimising delays in bringing new drugs to market.
Increasing Environmental Concerns
Companies in sectors with significant environmental impacts, or those vulnerable to climate change, must anticipate and manage risks related to sustainability and environmental regulations.
Example: An oil and gas company implements an Emerging Risk Framework focused on environmental risks, including the impact of climate change legislation on operations and the transition to renewable energy sources, to guide its long-term strategic planning.
Market’s Volatility and Economic Uncertainty
Periods of economic instability or market’s volatility necessitate a robust framework to quickly identify and respond to risks that could affect financial stability and operational resilience.
Example: A financial services firm develops an Emerging Risk Framework to identify and manage risks arising from global economic instability, including interest rate fluctuations, currency volatility, and the impact of trade wars on investment portfolios.
High-Profile Data Breaches or Cybersecurity Threats
Organisations that rely heavily on digital infrastructure, particularly those handling sensitive customer data, need an Emerging Risk Framework to address the evolving landscape of cybersecurity threats.
Example: An e-commerce platform utilises an Emerging Risk Framework to address cybersecurity threats, focusing on protecting customer data through advanced security measures and rapid response strategies to mitigate the impact of potential data breaches.
Changes in Consumer Behaviour
Businesses facing rapid shifts in consumer preferences or disruptions in traditional business models (e.g., the rise of the sharing economy or e-commerce) benefit from an Emerging Risk Framework to stay competitive and relevant.
Example: A traditional brick-and-mortar bookstore chain adopts an Emerging Risk Framework to explore risks and opportunities arising from digital transformation, including the rise of e-books and online retail, to adapt its business model and customer engagement strategies.
Supply Chain Complexities
Companies with complex, global supply chains face risks from logistical disruptions, trade conflicts, and supplier vulnerabilities. An Emerging Risk Framework can provide strategies for resilience and continuity.
Example: A multinational electronics manufacturer implements an Emerging Risk Framework to manage risks associated with its global supply chain, including dependency on single-source suppliers and potential disruptions from natural disasters or political instability.
Crisis and Disaster Recovery
In the aftermath of a crisis or disaster, organisations need to reassess their risk landscape. An Emerging Risk Framework helps identify new risks that may have arisen and guides recovery and mitigation efforts.
Example: A hospitality and tourism company employs an Emerging Risk Framework to navigate the post-pandemic landscape, identifying new risks such as changing traveller preferences for safety and cleanliness, and opportunities for innovation in customer experience.
Industry Disruption
When new entrants or innovations threaten to disrupt established business models, companies must adapt quickly. An Emerging Risk Framework enables them to identify and respond to disruptive threats proactively.
Example: A cable television provider uses an Emerging Risk Framework to address risks from industry disruption caused by streaming services. The framework helps identify strategic responses, such as developing its own streaming platform or forming partnerships with existing services, to retain and grow its customer base.
In essence, an emerging risk framework is required whenever an organisation must navigate uncertainty, respond to rapid changes in its external environment, or seeks to maintain a competitive edge by being proactive rather than reactive in its risk management practices. It provides a structured approach to identifying, assessing, and managing risks that are uncertain but could have significant implications for the organisation's strategic objectives and operational resilience.
How to Develop an Emerging Risk Framework?
Implementing an emerging risk framework from scratch involves establishing foundational elements, processes, and practices within an organisation to systematically identify, assess, and manage risks that have not yet fully materialised or are not well understood.
Here are the steps you can take to design these new capabilities and tools, while developing a risk aware culture if your organisation lacks one:
Step 1: Gain Executive Buy-in and Establish Leadership
Secure commitment from top management by demonstrating the value of an Emerging Risk Framework in safeguarding and enhancing competitive advantage. You can leverage the information enclosed in this article to build your business case.
Appoint a risk management leader or team responsible for the development and implementation of the framework. This could be a Chief Risk Officer (CRO) or equivalent position if such role does not already exist.
Step 2: Define the Framework's Scope and Objectives
Clarify the scope of the Emerging Risk Framework by identifying key business areas and functions, and defining the types of risks (e.g., technological, market, regulatory) it will cover. Assess the organisation's risk appetite and consider both external and internal factors affecting risk exposure. We invite you to read our detailed article how to scope emerging risks.
Set clear objectives for the framework, such as enhancing resilience, supporting strategic decision-making, and fostering a risk-aware culture.
Step 3: Establish a Risk Identification Process
Establish mechanisms for continuously scanning the internal and external environment to identify potential emerging risks. This includes setting up processes for environmental scanning, trend analysis, and stakeholder engagement.
Create channels for risk reporting within the organisation, encouraging employees at all levels to report observed risks or uncertainties.
Step 4: Create Risk Assessment Criteria
Develop criteria for evaluating the significance of identified risks, considering factors like potential impact, likelihood, and velocity of risks.
Implement a risk assessment process that utilises both qualitative and quantitative methods to prioritise risks based on their potential effect on organisational objectives.
Step 5: Design Risk Response Strategies
Outline possible risk responses, including avoidance, mitigation, transfer, or acceptance, and for some risks, exploitation for organisational benefit.
Develop action plans for prioritised risks, assigning responsibilities and resources for implementing risk responses.
Step 6: Integrate into Organisational Processes
Ensure the risk framework is integrated into strategic planning, project management, and operational processes, making risk consideration a part of decision-making at all levels.
Promote a risk-aware culture by including risk management training in employee development programs and incentivising proactive risk management behaviours.
Step 7: Monitor, Review, and Report
Effective management of emerging risks requires ongoing monitoring and review. This ensures that any new information or changes in the external environment are quickly identified and assessed for their potential impact on the organisation. Regular reviews of the risk landscape and the effectiveness of response strategies are also necessary to ensure that the risk framework remains relevant and effective over time.
Set up ongoing monitoring to detect new emerging risks and to assess the landscape for changes that might affect the probability or impact of existing risks.
Regularly review and update the framework to ensure it remains relevant and effective in the face of organisational and environmental changes.
Establish reporting mechanisms to communicate risk management activities and findings to stakeholders, ensuring transparency and accountability.
Step 8: Continuously Improve
Implement a process for continuous improvement based on feedback, lessons learned, and the outcomes of risk management activities.
Engage in benchmarking and learning from industry best practices to enhance the organisation's Emerging Risk Framework.
Embedding Governance, Culture, and Metrics into Emerging Risk Management
Effective emerging risk management depends on strong governance, constructive behaviours, and clear measures of progress. These elements create the conditions for reliable foresight and support leaders as they translate weak signals into strategic action.
Governance
Clear governance defines who owns emerging risk identification, analysis, and escalation. Boards set direction through appetite statements, strategic priorities, and regular review of emerging risk themes. Committees support this work by integrating horizon scanning, scenario insights, and capacity considerations into their oversight. Executives ensure that early signals flow through the organisation, that risk themes remain current, and that action plans align with strategy and performance expectations. This structure helps leadership teams anchor decisions in consistent views of uncertainty and long-term exposure.
Culture
Culture plays a central role in how early risks surface. Teams raise signals when leaders encourage open dialogue, value challenge, and recognise early escalation. Frontline insight, informed debate, and simple reporting channels help shape shared awareness of emerging themes. These behaviours support learning, accelerate adaptation, and strengthen decision quality. They also reinforce psychological safety, which remains essential for timely identification of weak signals and shifts in external conditions.
The Risk Within provides a roadmap for embedding psychological safety into risk management. It identifies critical touch points across the risk lifecycle and offers clear actions to align leadership, culture, and governance. It is designed to help risk functions integrate more deeply into the business and strengthen decision-making at every level.
Measurement
Measurement provides leaders with a clear view of how emerging risk capability matures over time. A simple Emerging Risk Maturity Grid helps track progress:
Level 1 – Reactive: Risks identified after events occur.
Level 2 – Aware: Basic scanning with inconsistent insight capture.
Level 3 – Structured: Defined processes and regular cross-functional input.
Level 4 – Integrated: Emerging risks inform strategy, planning, and appetite.
Level 5 – Foresight-Driven: Scenario insights, indicators, and scanning embedded into leadership rhythms.
These elements strengthen oversight, support clarity of ownership, and build an environment where emerging risks inform strategic choices with confidence and consistency.
Explore how emerging risk insight strengthens strategy, governance, and leadership practice through the Aevitium Integrated Risk Management Pathway™ and the Guiding Principles for an Effective Control Environment.
Conclusion
Strengthening emerging risk capability is a leadership commitment. It requires clear governance, constructive behaviours, and the discipline to integrate weak signals into strategic discussions. A structured framework helps leaders use foresight to guide decisions, align priorities, and adjust appetite as conditions evolve. It also reinforces the behaviours that encourage early escalation and open dialogue, which support better choices during periods of uncertainty.
The most effective organisations treat emerging risk as part of their strategic rhythm. They review themes regularly, test assumptions, and use horizon scanning to anticipate how external shifts may influence their operating model, investment plans, or transformation priorities. This approach builds resilience and positions the organisation to adapt with purpose.
You can begin by reviewing your current processes and identifying where ownership, culture, or measurement can be strengthened. Engaging a broad range of stakeholders provides valuable insight, while a clear path for escalation ensures that early signals reach decision-makers quickly.
Aevitium LTD supports leadership teams that want to build these capabilities with confidence and clarity. Our advisory services help organisations apply structured foresight, align appetite with emerging conditions, and develop decision processes that sustain resilience over time.
About the Author: Julien Haye
Managing Director of Aevitium LTD and former Chief Risk Officer with over 26 years of experience in global financial services and non-profit organisations. Known for his pragmatic, people-first approach, Julien specialises in transforming risk and compliance into strategic enablers. He is the author of The Risk Within: Cultivating Psychological Safety for Strategic Decision-Making and hosts the RiskMasters podcast, where he shares insights from risk leaders and change makers.
Additional Resources
For a deeper understanding of cybersecurity risks, visit National Institute of Standards and Technology (NIST).
To learn more about managing emerging risks, the Global Association of Risk Professionals (GARP) offers a range of resources and certification programs.
For updates on regulatory compliance requirements, The International Compliance Association (ICA) provides comprehensive guides and articles.
FAQ: Emerging Risks and Frameworks
1. What are emerging risks?
Emerging risks are newly identified or evolving threats characterised by their novelty, unpredictability, and potential to significantly impact various aspects of an organisation, such as operations, strategy, or compliance. Examples include technological advancements, regulatory changes, climate risks, and geopolitical shifts.
2. Why is managing emerging risks important?
Effectively managing emerging risks allows organisations to anticipate changes, adapt strategies, and mitigate potential threats before they materialise. It also helps foster innovation, enhance resilience, and secure a competitive edge in an unpredictable business environment.
3. What is an emerging risk framework?
An emerging risk framework is a structured process designed to identify, assess, and manage risks that are new, evolving, or difficult to predict. It involves horizon scanning, stakeholder engagement, risk assessment, and the integration of risk considerations into decision-making.
4. How can I identify emerging risks in my organisation?
They can be identified through environmental scanning, trend analysis, and scenario planning. Engaging with stakeholders, including employees, customers, and industry experts, can also provide valuable insights. Tools such as horizon scanning reports and external risk databases are often helpful.
5. When should I implement an emerging risk framework?
Organisations should implement an emerging risk framework when:
Entering industries with rapid technological advancements.
Expanding into new markets.
Facing regulatory changes or environmental pressures.
Dealing with supply chain complexities.
Encountering significant shifts in consumer behaviour or market conditions.
6. What are the steps to developing an emerging risk framework?
Key steps include:
Securing executive buy-in and leadership.
Defining the framework’s scope and objectives.
Establishing a risk identification process.
Assessing and prioritising risks.
Designing response strategies.
Integrating risk management into organisational processes.
Continuously monitoring, reviewing, and improving the framework.
7. Can emerging risks also be opportunities?
Yes, emerging risks often present opportunities for innovation and growth. For example, technological disruptions can lead to new product development, and regulatory changes might open up untapped markets. A proactive risk framework helps organisations capitalise on such opportunities.
8. How does fostering a risk-aware culture help in managing emerging risks?
A risk-aware culture ensures that all employees understand the importance of identifying and addressing risks proactively. It encourages collaboration, open communication, and innovative thinking, enabling organisations to respond effectively to emerging challenges.
9. Are there case studies showcasing successful management of emerging risks?
Yes, examples include:
A global bank strengthening cybersecurity measures to mitigate cyber threats.
A retailer adapting to e-commerce growth and supply chain disruptions.
An energy company transitioning to renewable energy to address regulatory and market changes.
These cases illustrate how proactive frameworks help organisations manage risks while seizing strategic opportunities.
10. How can Aevitium LTD help with managing emerging risks?
Aevitium LTD provides expert advisory services to design tailored emerging risk frameworks. Our approach includes horizon scanning, trend analysis, and strategic risk planning to equip organisations with the tools needed to navigate uncertainty, foster resilience, and drive growth.
11. How can I learn more about emerging risks and risk management?
Explore resources from:
National Institute of Standards and Technology (NIST) for cybersecurity insights.
Global Association of Risk Professionals (GARP) for certifications and resources.
International Compliance Association (ICA) for regulatory compliance guidance.