Risk Types
Unforeseeable / Hidden Risks
Unforeseeable / Hidden Risks
Unforeseeable / Hidden Risks
"Black Swan" events are described by Nassim Nicholas Taleb in his bestselling book: The Black Swan - The Impact of the Highly Improbable.
They:
- are hidden and rare
- are highly improbable / unforeseeable yet often explained in hindsight as if highly predictable
- involve no choice to respond
- 9/11, WMD
Foreseeable / Obvious Risks
Unforeseeable / Hidden Risks
Unforeseeable / Hidden Risks
"Gray Rhino" events are described by Michele Wucker in her bestselling book: The Gray Rhino - How to Recognize and Act on the Obvious Dangers We Ignore.
They:
- are obvious and foreseeable
- are highly probable
- involve a choice to respond, or not
- most likely responses are inadequate
- ignored / dismissed
- pandemics, climate risk
Geopolitical Risks
Unforeseeable / Hidden Risks
Geopolitical Risks
Geopolitical Risks can be described as black swans, gray rhinos and all the animals in a jungle and rainforest combined!
They:
- can be hidden or obvious
- are improbable or probable
- involve a decision on how to respond
- are firm specific
- are diverse & complex
- constantly change
- are inherent in most ESG issues & the UN's SDGs
- regulatory risk, sanctions, political violence & more