Using ERM to Manage Emerging Risks
PricewaterhouseCoopers released, earlier in the year, an interesting booklet on emerging risks for enterprises and how traditional Enterprise Risk Management (ERM) techniques can be used to manage them. This differs considerably from the management of traditional risks. For example a particularly difficult but important element of dealing with emerging risks is identifying the risks. For this, the study looks first to the global risks developoed by the World Economic Forum. Enterprises need to consider how these megatrends might present risks for their enterprise. For example, one of the risks of the WEF is coastal flooding brought about by climate change. If an enterprise owns coastal properties. ERM techniques would suggest that the risk of their being flooded be monitored and measured such that if the risk begins to exceed enterprise risk tolerances, then action needs to be taken. In this way ERM techniques bring a measure of discipline and rigor to the process. The PWC study is worthwhile reading for any ERM practitioners. It is downloadable free from the PWC website.