A risk is the probability of a negative event such as liability, damage, injury or loss. Risks are due to weaknesses and vulnerabilities in the natural environment, in our social systems, in our economies and in financial markets. In finance, risk relates to the probability that the return on investment will be lower than forecast.
Examples of risks that we use when customizing SAVi:
Economic: Interest rate fluctuations; currency devaluation; unexpected changes in feed-in tariffs.
Revenue: Reduced demand due to changing consumer preferences or stagnant wages.
Climate: Lower cash flow due to carbon taxes, write-offs and impaired assets caused by freak weather events and natural catastrophes.
Environmental: Reduced revenue due to polluted water and land.
Social: Impacts on cash flow caused by industrial action and civil disturbances.
Legal: Disruptions in construction and operation resulting from poorly executed environmental and social impact assessments.
Reputational: Allegations of human rights abuses and subsequent divesting.