Risk identification is the process of identifying potential risks by using existing knowledge, expert advice, and input from stakeholders. This may involve conducting workshops to actively involve participants. The objective is to determine which sectors and geographic regions need further analysis, alongside identifying relevant data sources and potential future risks.
To begin, it is important to analyse the current and anticipated climate risks using a combination of observations, expert input, and local knowledge. Based on this information, future scenarios can then be developed, and potential impacts assessed. Hazardous situations and potential extreme events should be considered when assessing impacts, alongside identifying spatial hotspots and planned adaptation measures.
In the second step you will rank the risks based on their relevance and potential severity. Key risks are those which have the potential to lead to severe consequences for a given region, project, or value chain. The importance of the system, as well as the magnitude and likelihood of the risk, should be considered when determining its relevance. The table below can be used as a tool for classification depending on the level of knowledge on impacts, risk, and the specific contexts of the assessment.
4 Very high
Frequent, very likely and major losses and damages within important systems. Loss of system functionality, irreversibility of consequences, large extent, very high pervasiveness, high potential for impact thresholds or tipping points, cascading effects beyond system boundaries, systemic risk. Low ability to respond or adapt to the risk.
Likely significant losses and damages, disturbance of system functionality, long-term effects, large extent and high pervasiveness, potential for impact thresholds or tipping points, cascading effects beyond system boundaries and systemic risk. Moderate ability to respond or adapt.
Likely moderate losses and damages, moderate disturbance of system functionality, effects are temporary or unfold slowly with a moderate extent/pervasiveness. Moderate to high ability to respond or adapt.
None to low losses and damages. No or rare disturbance of functionality, high ability to respond or adapt.
Classes for assessing the relevance of risk
In the third step you will write a risk screening report that outlines the process used to identify potential risks, including a table that documents the impact and levels of risk. Additionally, include any relevant information about the identified risks and explain their significance. Make sure to involve the appropriate stakeholders in the process and summarise the findings for a broader audience. Share the report with stakeholders and consider seeking input from external experts who were not involved in the initial risk assessment. You may also want to create preliminary impact chains for risks that affect multiple systems or sectors, including any major gaps in adaptation measures.