Key Risk Assessment

Key Risk Assessment#

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The outputs of the climate risk analysis generate information on the extent, duration, frequency and intensity of risks and thus already provide comprehensive insights on relevant risks to be considered. These remain to be contextualized and prioritised. Therefore, as a further analytical step, risks need to be evaluated to identify key risks that may become severe under particular conditions and can lead to severe consequences. Additional insights into the severity and urgency of risks as well as considerations on the capacity of a region to adapt and cope with risk support further understanding and managing of risks (Fig. 27; Table 7). This step also allows for the integration of responses, the fourth driver of risk according to the IPCC Risk Propeller, therefore connecting past CRM measures with future CRM management.

Risk Severity refers to the extent of potential serious negative impacts from climate events that could harm a region’s functioning and objectives. Considering the risk outcome from workflow(s) application, it is encouraged to also involve stakeholders, experts and priority groups for collecting information on the perception of risks, finally resulting in an indication of risk severity.
Risk Urgency refers to the temporal dimension of risk. For instance, potential impacts that are assessed to be changing quickly or sooner than expected, increase the urgency of attending to the respective risk.
Capacity corresponds to the ability to cope with and adapt to actual and potential harm triggered by climate change. It includes absorptive, adaptive and transformative measures which can happen autonomously (e.g., farmers shifting to drought tolerant crops) or through planned strategies and policies.

Capacity depends on implemented and planned CRM measures as well as on potential opportunities emerging from tackling the respective risk. Such can be divided in five categories, considering social, human, physical, financial or natural systems, thus providing important entry points for indicator selection and evaluation.

../../_images/framework_key_risks_aspects.png — Fig. 27 Key Risk Assessment conceptualisation
considering severity, urgency and capacity.
Credit: CLIMAAX consortium.#

Table 7 Possible considerations within assessment of risk severity, urgency and capacity.#
Severity	Urgency	Capacity
Risks are considered severe if potential impacts Are high in magnitude, likelihood, or duration (e.g., severe impacts, large areas, cascading effects, irreversibility); Negatively affect the functioning of relevant systems and processes; May occur during critical timing of processes (e.g., increased precipitation projected for harvest seasons); Coincide with low capacity and may incur adaptation limits.	Urgency of risks is related to the timing of hazards and depends on Risk severity; Observed or projected change in the near future.	Capacity relates to CRM measures implemented and in planning stages; Emergent development and business opportunities arising from addressing risks; And should consider social, human, physical, financial or natural dimensions.

Implemented or planned CRM measures greatly influence the ability to respond to risk and thus provide an important baseline for capacity assessment. Functioning heatplans in a city, innovative water irrigation systems against agricultural drought or also planned policy measures are crucial to take into consideration when prioritising risks. However, capacity also refers to opportunities arising while dealing with the respective risk. For example, if a development plan is being conducted in a region, inputs on current and future risks are required to appropriately plan for, e.g. new housing. Such planning may entail suitable and acceptable adaptation measures (e.g., nature based solutions, and/or insurance coverage), thus effectively contributing to the increase of the overall capacity of a region.

These elements of the Key Risk Assessment integrate into a risk dashboard for risk prioritisation (Fig. 28).The assessment should be carried out by harnessing participatory processes for a bottom-up verification and may thus involve experts, stakeholders and priority groups.

../../_images/framework_key_risks_dashboard.png — Fig. 28 Key Risk Assessment Dashboard considering severity, urgency and capacity. The latter consists of a) CRM measures that have already been undertaken and b) opportunities emerging from tackling climate-related risks. The overall outcome suggests a risk prioritisation of the respective risk outcomes leading to key and less urgent risks to consider. Source: Adapted from the European Climate Risk Assessment (EEA 2024).#

Even if only one risk workflow has been chosen, regions can still profit by adding more detail to the climate risk analysed by assessing e.g., relevance, baseline CRM measures and opportunities.

Risk prioritisation should result in assigning “key” risks. Key Risks are recommended to be included directly in CRM strategies and plans while other risks would be further monitored.

Tip

The Key Risk Assessment step is a crucial point for reflecting on principles from the conceptual background (especially social justice/just resilience and the precautionary approach) as well as context, objectives and risk ownership that were set during the Scoping step.

Tip

It may be beneficial to include considerations that go beyond direct and tangible impacts of potential climate risks and consider indirect and intangible impacts such as environmental, cultural or psychological impacts.