In Expanding Perspectives of Business Sustainability Risk and other previously released posts, our sustainability consulting has focused its attention on defining key risks, identifying reference points, and evaluating the potential impacts to long-term business sustainability. Expanding on this discussion, we turn our attention to ‘risk assessment’ by exploring popular risk frameworks and their applicability to business sustainability risk management.
The PricewaterhouseCoopers whitepaper, A Practical Guide to Risk Assessment, offers one such perspective of risk measurement and management. Beginning with a definition:
“Risk assessment is a systematic process for identifying and evaluating events (i.e., possible risks and opportunities) that could affect the achievement of objectives, positively or negatively. Such events can be identified in the external environment (e.g., economic trends, regulatory landscape, and competition) and within an organization’s internal environment (e.g., people, process, and infrastructure). When these events intersect with an organization’s objectives—or can be predicted to do so—they become risks. Risk is therefore defined as the possibility that an event will occur and adversely affect the achievement of objectives.” – PricewaterhouseCoopers