Different Tools for Risk Assessments
Tashi pulled out his bottle of water and placed it in front of him as he continued the discussion.
“The Asia-Pacific Economic Cooperation (APEC) has developed a guideline on disaster risk management for MSMEs. The guideline was developed as a response to intensifying impacts of disaster risks and the need to strengthen disaster risk management strategies.
It identifies the following points on why risk management is important for MSMEs:
- Improve identification of opportunities and threat
- Effectively allocate and use resources for risk response
- Comply with relevant legal and regulatory requirements and international norms
- Improve operations effectiveness and efficiency
- Improve organization learning and resilience
- Improve stakeholder trust and confidence
(Bakar, et al., 2022)
Here are some relevant frameworks,
i) Sendai Framework for Disaster Risk Reduction (DRR)
The Sendai Framework for DRR 2015-2030 is an international document adopted by 187 UN member states. It advocates for, “The substantial reduction of disaster risk and losses in lives, livelihoods, and health and the economic, physical, social, cultural and environmental assets of persons, businesses, communities and countries (UNDRR, 2023).
It specifies four priorities for action:
Learn more about the Sendai Framework for DRR here.
ii) APEC DRR framework
The APEC DRR framework focuses on addressing the impacts of disasters with holistic, more proactive, multi-stakeholder, multi-sectoral, and strategic interventions to make APEC economies more resilient.
The APEC DRR framework has four pillars to aim to have adaptive and disaster-resilient APEC economies. They are:
(Bakar, et al., 2022)
iii) ISO 31000 Risk Management Guidelines
Other commonly used international guidelines by private organizations are the ISO 31000:2018 Risk Management and the ISO 22301:2019 Business Continuity Management Systems. Here, risk management focuses on efforts to manage risks before the occurrence of losses and business continuity management focuses on responding to and recovering from post-loss incidents.
(Bakar, et al., 2022)
As the climate and natural risks continue to exasperate and affect livelihoods and businesses differently across regions, various relevant guidelines and frameworks can come into play.”
“So, which one are we going to use?”
“Well, for our purpose, we are focused on assessing the climate and natural risks for MSMEs and on exploring the opportunities for renewable energy integration. So, I have taken cues from the existing frameworks and developed a general tool for our purpose.”
Tashi then reached out to his bag and pulled out his laptop.
“I’ll show you and we’ll go over it. Ok?”
Everyone drew closer as Tashi turned on his laptop.