Key Risk Assessment

Guiding questions

• How are risks perceived by stakeholders/experts/relevant groups? What are shortcomings according to these groups?

• Which stakeholders/experts/relevant groups that have not been identified in the scoping process, may be of relevance now in the light of the Risk Analysis results?

• Are there adaptation/responses already in place? (e.g. question for stakeholders)

• What response/adaptation actions are already in place?

• When and where do you cross your coping capacity?

• How are the risks affecting stakeholders, systems, sectors or vulnerable groups?

• What are opportunities emerging from the calculated risk(s)?

• Which are the less urgent risks that need to feed into the monitoring process?

The outputs of the climate risk analysis generates information on extent, duration, frequency and intensity of risks and thus already provides comprehensive insight on relevant risks to be considered. As a further analytical step, key risks may be identified. This analytical step can provide additional insights into the severity of risks and urgency for further attention to be paid to understanding and eventually managing risks. The two entry points to such analysis are:

Guiding questions - Risk Severity

• What are relevant stakeholders, experts or representatives that need to be considered?

• How important is financial capacity, income, poverty etc. for the risk severity? Which other indicators may be important for risk severity?

• How do you evaluate your specific risk outcome in the light of the given resilience maturity?

• What adaptation options are already in place?

• Which risk outcome is acceptable/tolerable/intolerable?

Risk Severity: Risks may be considered severe if they:

• Are high in magnitude, likelihood, or duration (e.g. severe impacts, large areas, cascading effects, irreversibility)

• Affect functioning of central systems and processes

• May occur during critical timing of processes (e.g. increased precipitation projected for harvest seasons

• Coincide with low ability for risk reduction or management

• Are reinforced by non-climatic risk drivers such as unsustainable land use or water management, land degradation, urbanization, eutrophication and pollution, etc.

Guiding questions - Risk Urgency

• How does Risk Severity affect the Risk Urgency?

• Which risks need to be addressed urgently? Which aspects influence the urgency?

• How can you rank your risk outcome (from Risk Analysis/Toolbox) in an urgency scoring?

Risk Urgency is related to:

• Hazards having been observed or projected to worsen significantly

• CRM measures implemented are insufficient and/or in planning

• emergent development and business opportunities are contingent upon risk manifestation

Urgency and severity partially overlap (for negative effects associated with risks), and we suggest to consider both aspects jointly in the key risk assessment, which can be done by stakeholders and/or experts. The following table provides further insight into processes and indicators to be used for understanding risk severity and urgency. We propose two modes of engagement: A stakeholder-driven assessment and an expert-driven, but stakeholder informed assessment.

Table 7 Processes and indicators for understanding risk severity and urgency

Mode/aspect	Risk Severity	Urgency
Stakeholder driven assessment. Outcome: Stakeholder pri-ority ranking of key risks to further closely monitor and manage based on qualitative data insight	Consider anecdotal evidence of socio-economic consequences of observed events for ranking of key risks. Employ available information on implemented and planned CRM.	Broadly consider qualitative ob-served and projected changes in temporal aspects of risk. Derive basic overview of currently planned CRM and emergent devel-opment and business opportunities, which may be affected by risks.
Expert-driven and stake-holder informed Outcome: Quantitative/ qualitative priority ranking of key risks to further closely monitor and manage including concrete actions and timing	Assess consequences of impacts and risks through statistics of observed events or models of future risk. Rank risks according to survey-based stakeholder risk prefer-ence (acceptable, tolerable, intol-erable risks). Assess adaptive capacity and im-plemented and planned CRM using relevant indicators. Consider non-climatic risk drivers.	Consider quantitative observed and projected changes in temporal aspects of risk using climate scenarios. Derive basic detailed currently planned CRM and emergent social and business opportunities, which may be affected by risks. Apply Urgency Scoring Framework.

Stakeholders and experts would consider adaptation responses and climate risk management in place and the level of adaptive capacity (through indicators such as technological, social, economic, infrastructural or institutional capacity). Indicators may be taken from the Regional Resilience Maturity Framework (see P2R project) and may include regional governance and institutional capacity; plans and policy instruments; human resources and technical skills; participatory governance and stakeholder engagement; public support, awareness and climate change communication; financial capabilities; innovation potential assessment.

Tip

The outcome of the Key Risk Assessment can be assigned to high/medium/low risk profiles which then can be hierarchically ordered and assigned as “key” or “less urgent” risk. Key risks should enter the Climate Risk Management funnel.

Tip

It may be helpful for your region to assess its resilience maturity. You can find more about this at the [P2R website] (https://www.pathways2resilience.eu/).