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How to Identify and Manage Emerging Risks?
- Julien Haye
- Feb 12, 2024
- 19 min read
Updated: Feb 22
What are the top 5 emerging trends that will reshape your organisation’s future?
Identifying these new and unpredictable challenges that your organisation hasn't faced before is crucial for strategic planning and risk management, helping you to navigate a complex and unpredictable global landscape. These emerging challenges, often unprecedented and unpredictable, necessitate a readiness to adapt and innovate, the development of a risk aware culture, ensuring your organisation cannot only sustain growth but also capitalise on the opportunities presented by market and societal shifts.
Yet, how many organisations are truly prepared to adapt to and future-proof against these emerging changes? In my experience, not many! This is often due to a lack of advanced capabilities that can anticipate and tackle the unpredictable nature of emerging threats and opportunities. In a world where technology, regulations, and market dynamics evolve rapidly, traditional risk management methods fall short. The consequence? Many commercial and non-profit organisations risk being outpaced by more agile competitors, potentially missing out on critical opportunities for growth and innovation. As businesses like Kodak and Nokia learnt the hard way, this can be nearly fatal!
So at Aevitium LTD, we aim to provide you with a structured and systematic approach towards identifying and managing emerging risks. Such a framework is indispensable for your organisation intent on proactively identifying the top emerging developments poised to impact its operations, supported by a risk-aware culture. By implementing the strategic and operational management principles outlined in this guide, you can enhance your organisation’s resilience, stimulate innovation, and secure a competitive edge. This guide will equip you and your teams with the knowledge and skills to build a systemic approach to identify and manage emerging risks tailored to your organisation’s needs.
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 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.
Why do you Need an Emerging Risk Framework?
Navigating the uncertainties of emerging risks without a comprehensive framework is like sailing through uncharted waters without a compass. Such framework provides organisations with the tools and methodologies needed to systematically identify, assess, and respond to these risks. It helps businesses stay ahead of the curve by anticipating changes, adapting strategies accordingly, and mitigating potential threats before they materialise. Implementing such a framework is essential for fostering innovation, enhancing resilience, and securing a competitive advantage in today's rapidly changing world.
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 or principal risks are serious uncertainties that have the ability to disrupt an organisation's operations, strategy, or overall well-being. These uncertainties are frequently distinguished by their unpredictability, complexity, and potential for significant consequences. While principal risks are well-established and widely acknowledged, emerging risks are freshly found or changing and may not yet be fully recognised.
How to Identify Emerging Risks?
Identifying such inherent risks is the cornerstone of proactive risk management. It involves leveraging horizon scanning to search the external environment for signals of change that could potentially impact the organisation. Techniques such as environmental scanning, trend analysis, and scenario planning are valuable in identifying emerging risks. Engaging with stakeholders, including customers, employees, and industry experts, can also provide insights into new challenges and opportunities on the horizon.
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 identified, the next step is to assess and prioritise these risks based on their potential impact on the organisation and the likelihood of their occurrence. Given the inherent uncertainty of emerging risks, this process often involves a combination of qualitative judgment and quantitative analysis. Risk assessment tools like risk matrices and impact/probability charts can help in evaluating and ranking risks, enabling organisations to focus their resources on the most significant threats.
How to Mitigate them?
Organisations must create and implement plans to handle evolving risk strategies. The response—whether to prevent, minimise, transfer, or accept the risk—will be determined by the organisation's risk appetite and strategic objectives.
We should create a bespoke action plan for each important risk, describing precise steps to mitigate or capitalise on the risk. The uncertainty of emerging hazards needs strategy change as new information becomes available, emphasising the value of flexibility and agility.
When establishing plans to manage technical threats, for example, take into account both standard cybersecurity measures and novel AI-powered monitoring systems. As new threats emerge, make sure your action plans reflect the most recent defensive technologies.
When to Implement an Emerging Risk Framework?
An emerging risk framework becomes essential in several scenarios, reflecting the need for organisations to adapt and respond to the rapidly changing risk landscape. We invite you to read our annual review of Risk Mega-Trends to gain some insights on areas of focus.
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.
In addition, incorporating technology in risk management, particularly advanced analytics, AI, and machine learning, is a game-changer. Advanced analytics, artificial intelligence, and machine learning can provide valuable insights into potential risks and trends, enabling organisations to respond more swiftly and effectively. Moreover, digital platforms can facilitate collaboration and information sharing across the organisation, ensuring a cohesive and integrated approach to emerging risk management.
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.
Conclusion
Implementing an effective framework to identify emerging risks is a dynamic and iterative process that requires commitment across the organisation. By following these steps, an organisation can establish a robust framework capable of managing their risks proactively, thereby enhancing its resilience and strategic agility.
In a world characterised by rapid change and uncertainty, the ability to manage emerging risks effectively is more important than ever. By developing and implementing a comprehensive approach to identifying emerging risks, you organisations can not only protect themselves against potential threats but also seize new opportunities that arise from these uncertainties. This proactive approach to risk management is essential for driving innovation, enhancing resilience, and securing sustainable success in the modern business environment.
It's time to take a proactive stance on emerging risks. Begin by conducting a thorough review of your current risk management practices, with a focus on identifying gaps in your approach to emerging risks. Engage with a wide range of stakeholders to gather diverse perspectives and insights. Remember, in the dynamic landscape of emerging risks, staying informed, agile, and prepared is the key to navigating the challenges and opportunities ahead.
To navigate the complex landscape of modern risks, partnering with a trusted risk advisor could prove particularly valuable. At Aevitium LTD, our team of seasoned risk and compliance experts and former regulators brings unparalleled insight and tailored solutions to uncover potential threats and opportunities that you may have overlooked internally.
By staying ahead of industry trends and emerging threats, Aevitium LTD ensures your organisation is prepared for the unexpected. By offering an extensive range of services such as trend analysis and business resiliency planning, Aevitium LTD ensures the strong backing required to safeguard your organisation, personnel, and resources.
Take the first step towards future-proofing your organisation. Schedule a free consultation with our risk management experts and advisors. Equip your organisation with the knowledge and tools to thrive in an unpredictable world.
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.
