Recent large scale concerns like food and energy supply insecurity, technology overhaul, and the global financial crisis have changed the course of business. That’s why companies must adopt a systematic approach to emerging risk identification, assessment and management as part of their enterprise Risk Management (ERM) strategy.
Extending Enterprise Risk Management (ERM) to address emerging risks
In the past several years, many large scale events that were once thought unlikely, distant, or isolated — climate change, food insecurity, energy supply volatility, overhaul of technology, and the global liquidity crisis, to name a few — have manifested and changed the course of business for many organizations.
Such global or "emerging" risks are systemic in nature and typically span beyond the capacity of a single enterprise to contain. While their likelihood may have may have once been deemed low, their impact is so significant — potentially franchise destroying or opportunity generating — that they cannot be ignored. Not surprisingly, understanding unknowns has become a boardroom issue.
This whitepaper explores why companies must adopt a systematic approach to emerging risk identification, assessment and management as part of their overall approach to Enterprise Risk Management (ERM).