Interventions required to transform strategy into action
Option 6: Doing nothing Internal
communication
&
External communication
Both from inside and outside the organisation, doing nothing may be perceived as a lack of awareness on the part of management or a misperception of the potential severity of the emerging risk. Communication here intends to:
• Explain that the organisation is aware of the threat/opportunity (following the analyses performed in Steps 1 and 2)
• Explain the rationale behind adopting this strategy (Re)allocation
of resources
• Allocate the resources required for continuous monitoring
Roles,
responsibilities and rewards
• Undertake no adjustments to the roles, responsibilities or reward system
Leadership and culture
• Undertake no major changes in the way leadership and culture have been deployed thus far in the organisation
EXAMPLE Organisations such as Swiss Re or EFSA develop and sometimes publish lists of emerging is-sues or risks (see Section 1). Among those on the list, many are still too vague and are not fully assessed for their possible impact or relevance. However, they remain on “watch lists”, where they are monitored and their initial assessment is reviewed if certain indicators signal potential important changes. In the meantime, the organisation “does nothing” to manage these issues.
GLOSSARY
Complexity: The difficulty of identifying and quantifying causal links between a multitude of potential causal agents and specific observed effects (IRGC, 2005).
Complex system: A system composed of many parts that interact with and adapt to each other (OECD, 2009).
Emerging risk: A new risk, or a familiar risk in a new or unfamiliar context (re-emerging). These risks may also be rapidly changing (in nature). Although they may be perceived as potentially significant, at least by some stakeholders or decision-makers, their probabilities and consequences are not widely understood or appreciated (IRGC, 2010a).
Familiarity: Knowledge and experience with an organism, the intended application or activity and the potential receiving environment. A relatively low degree of familiarity may be compensated for by appropriate management practices.
Familiarity can be increased as a result of trial or experiment.
This increased familiarity can then form a basis for future risk assessment (UNEP, 1995).
Precautionary approaches: The 1992 Rio Conference on the Environment and Development adopted the Rio Declaration, whose Principle 15 states that: “In order to protect the envi-ronment, the precautionary approach shall be widely applied by States according to their capability. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation”.
Risk: An uncertain negative consequence of an event or an activity with regard to something that humans value (definition originally in Kates, et al., 1985, p. 21).
Risk appetite: The amount and type of risk that an organ-isation is prepared to pursue, retain or take (ISO 73, 2009).
Risk assessment: The task of identifying and exploring, prefera-bly in quantified terms, the types, intensities and likelihood of the (normally undesired) consequences related to a risk. Risk assess-ment comprises hazard identification and estimation, exposure and vulnerability assessment, and risk estimation (IRGC, 2005).
Risk governance: The identification, assessment, man-agement and communication of risks in a broad context. It includes the totality of actors, rules, conventions, processes and mechanisms concerned with how relevant risk information is collected, analysed and communicated, and how and by whom management decisions are taken (IRGC, 2005).
Risk management: The creation and evaluation of options for initiating or changing human activities or (natural or artificial) structures with the objective of increasing the net benefit to human society and preventing harm to humans and what they value; and the implementation of chosen options and the monitoring of their effectiveness (IRGC, 2005).
Risk profile: In the case of a single risk, a profile capturing several dimensions, qualitative and quantitative, that describe the risk in ways useful to a risk manager who is making initial decisions about what should be done. A profile may also describe a set of risks of concern to an organisation.
Risk tolerance: An organisation’s or stakeholder’s readiness to bear the risk after risk treatment (process to modify the risk) in order to achieve its objectives. (Note: Risk tolerance can be influenced by legal or regulatory requirements) (ISO 73, 2009).
Systemic risks: Risks affecting the systems on which society depends. The term “systemic” was assigned to risk by the OECD in 2003 and denotes the embeddedness of any risk to human health and the environment in a larger context of social, financial and economic consequences and increased inter-dependencies both across risks and between their various backgrounds (IRGC, 2005). Systemic risks are characterised by complexity, uncertainty and ambiguity. Most often, they are also trans-boundary.
Uncertainty: A state of knowledge in which the likelihood of any effect, or the effects themselves, cannot be precisely described. (Note: This is different from ignorance about the effects or their likelihood.) (IRGC, 2005).
36 // Appendix to the IRGC Guidelines for Emerging Risk Governance
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ACKNOWLEDGEMENTS
The work presented in this report was developed under the project leadership of Prof. Ortwin Renn and Marie-Valentine Florin. Chabane Mazri, on leave from Ineris, Paris, conducted the research and was the principal author, with support from the IRGC Secretariat (Marcel Burkler and Anjali Nursimulu).
An external peer-review was coordinated by Prof. Arthur Petersen (University College London and IRGC Scientific and Technical Council).
While they have been informed by deliberations in various workshops and meeting, the views and recommendations contained in this document are those of the authors and are not a consensus judgement by IRGC, its re-viewers or its sponsors.
Editorial suggestions were provided by Christine D’Anna. Final editing was done by Fabienne Stassen, EditOr Proof.
IRGC thanks EPFL and Swiss Re for their generous support, without which this publication would not have been possible.
40 // Appendix to the IRGC Guidelines for Emerging Risk Governance
The International Risk Governance Council (IRGC) is an independent non-profit foundation with an aim to help improve the understanding and management of risks and opportunities by providing insight into systemic risks that have an impact on human health and safety, on the environment, on the economy and on society at large.
Established in 2003 at the initiative of the Swiss government, IRGC is based at École Polytechnique Fédérale (EPFL) in Lausanne, Switzerland, with network partners in Europe, the US and Asia.
As a science-based think tank and neutral collaborative platform with multidisciplinary expertise, IRGC’s mission includes developing concepts of risk governance, anticipating major risk issues, and providing risk governance pol-icy advice for key decision-makers. It also aims to build bridges between science and polpol-icy in today’s challenging governance environment.
Members of the IRGC Foundation Board
Philippe Gillet (Chairman), Vice-President and Provost, École Polytechnique Fédérale de Lausanne (EPFL), Swit-zerland; Charles Kleiber (Vice-chairman), Former State Secretary for Education and Research, SwitSwit-zerland; John Drzik, President, Global Risk and Specialties, Marsh, Inc.; Chairman, Marsh & McLennan Companies Global Risk Center; José Mariano Gago, Former Minister for Science, Technology and Higher Education; Professor, Laboratory for Particle Physics (LIP), Portugal; Christian Mumenthaler, CEO, Reinsurance and Member of the Executive Com-mittee, Swiss Re, Switzerland; Daniele Tonella, CEO, AXA Technology Services, France; Margareta Wahlström, Assistant Secretary-General, Special Representative of the Secretary-General for Disaster Reduction (UNISDR), Switzerland; Wang Weizhong, former Vice-minister, Ministry of Science and Technology, People’s Republic of China
Members of the IRGC Scientific and Technical Council
Prof. M. Granger Morgan (Chairman), University and Lord Chair Professor, Department of Engineering and Public Policy, Carnegie Mellon University, USA; Dr. V.S. Arunachalam, Founder Chairman, Center for Study of Science, Technology and Policy (CSTEP), India; Prof. Wändi Bruine de Bruin, Professor of Behavioural Decision Making, Leeds University Business School, UK; Prof. Luis Abdón Cifuentes, Associate Professor of Industrial Engineering, Pontifica Universidad Católica, Chile; Dr. Gérard Escher, Senior Advisor to the President, École Polytechnique Fédérale de Lausanne (EPFL), Switzerland; Dr. John D. Graham, Dean, Indiana University School of Public and Environmental Affairs, USA; Prof. Manuel Heitor, Professor, Instituto Superior Técnico, Technical University of Lis-bon, Portugal; Prof. Janet Hering, Director, Swiss Federal Institute of Aquatic Science and Technology (EAWAG), Switzerland; Prof. Kenneth Oye, Associate Professor of Political Science and Engineering Systems, Massachusetts Institute of Technology (MIT), USA; Prof. Arthur Petersen, Professor of Science, Technology and Public Policy, University College London (UCL), UK; Prof. Ortwin Renn, Dean of the Economic and Social Science Department, University of Stuttgart, Germany; Prof. Jonathan B. Wiener, William R. and Thomas L. Perkins Professor of Law, Duke Law School, USA; Prof. Xue Lan, Professor and Dean, School of Public Policy and Management, Tsinghua University, People’s Republic of China