Five reasons current risk assessments don't work

Risks can be created and cascade from social to ecological systems and back again (and vice versa). Photo: J. Wilde/Unsplash

Are our current risk assessments really suited for world whose future is expected to deal with multiple large-scale environmental and intertwined socio-economic changes?

This question is unpacked in a new article by centre researchers Emmy Wassénius and Beatrice Crona, with special emphasis on sustainability risks.

Published in One Earth, they review and synthesise a range of risk concepts, as well as concepts from resilience thinking, to provide an interdisciplinary understanding of risk.

Uncertainty, time and risks

The five identified challenges that risk assessments currently face are:

1. Increased uncertainty: In complex systems, the level of randomness can be high. Our impacts on the biosphere can further exacerbate this, e.g., by triggering threshold effects. To assess risks, we need to understand randomness and use assessment methods that capture it.

2. Over-reliance on back casting: The future can be very different from the past and completely unprecedented things can happen. Using the past (“back-casting”) to determine future risks might therefore lead us wrong in the wrong direction.

3. Short time horizons: Risk assessments (e.g. in finance) are often focused on a few years, but to identify the risks of e.g. climate change we must look much further into both the past and the future.

4. Missing social-ecological links: Risks are increasingly related to the complex interactions between humans and nature. Risks can be created and cascade from social to ecological systems and back again (and vice versa). By not capturing these dynamics we miss important risks.

5. More indirect and distant risks: Similarly, in complex systems, risks are created and cascade across scales, e.g. from local to global and back again. We need to understand both “proximate” risks (direct) but also “distal” risks (indirect and sometimes faraway) to capture the full risk landscape.

Read more at Stockholm Resilience Center