Evaluating a risk is crucial to better understand and prioritize risks in order of importance. It's like sorting tasks to be accomplished based on their priority to better organize one's time and avoid delays. Similarly, whether at the company or project level, evaluating risks allows them to be ranked according to their probability and impact, to better guide efforts. This also allows for informed decision-making and deployment of adequate resources to prevent or mitigate the negative consequences of a risk.
The evaluation of the impacts of a risk depends on the type of mapping used. In a legal mapping, the impacts can be financial, legal, and reputational, while in a construction mapping, the impacts can be physical, environmental, and safety-related.
Thus, in a legal mapping, a risk could be the inability to comply with a legal obligation, resulting in fines, sanctions, and a negative image for the company.
In a construction mapping, a risk could be a construction accident causing injuries and property damage.
Whatever is the fields of work, all of evaluations are done on the occurrence and control. The occurence is the probability that the risk will occur and the control is how confident the we are that the risk will be avoided.
Let's take an example, that of a petrochemical company for whom lightning represents a risk for its storage sites.
The evaluation for one of its sites in a temperate environment and in an inhabited region could be:
With thunderstorms occurring every year, the probability of lightning striking a silo is estimated at 4/6.
If a silo explodes, the cost of repair and loss of product would be significant, and the impact is rated at 6/6.
If a silo explodes, because the region is inhabited, the incident will have media coverage, and the reputational impact can be estimated at 4/6.
If the explosion causes damage around the site, or if the site's security is called into question, the legal impacts can be significant and estimated at 5/6.
Because the site is equipped with lightning rods, the risk is perfectly controlled: 6/6.
The evaluation of this risk then allows it to be prioritized within the industrial risk mapping of this company: although it is potentially significant, its excellent control means that it will not be among the risks to be addressed as a priority.
