Overlooking opportunities from emerging risks can see risk management professionals become irrelevant to clients, a new report from the Risk and Insurance Management Society (RIMS) says.

Emerging risks – those for which the impact is not fully understood or readily assessed, particularly ones that are newly identified or unpredictable – offer potential upside, not just threat, RIMS says.

“Perhaps the biggest risk to avoid is the misconception that risks are only negative consequences or downside events,” RIMS’ Navigating the Complexities of Emerging Risks report says.

“Failing to pursue new opportunities, particularly over the longer term, can lead to the ultimate risk of becoming irrelevant.”

Organisations that quickly seized opportunities during the struggle with covid were noteworthy, for example virtual meeting and telehealth technology providers, and restaurant innovations such as pop-up grocery stores and parking lot seating for social distancing.

“As the work-from-home and digital business environment took hold, there arose nimble disruptors – and resulting winners – among firms that could quickly fill a need,” RIMS said.

It also recommends evaluating permanent aspects of emerging risk versus more transient ones.

“Just as the 9/11 tragedy permanently impacted air travel safety measures and the global financial crisis led to increased financial regulations, the recent pandemic will ... likely have more lasting impacts on the working environment, our digital requirements and even our culture,” the report said.

It recommends special “out-of-the box” thinking sessions, brainstorming, mind mapping and scenario planning to identify “seemingly outlier risks” that may otherwise be prematurely labeled as too improbable or difficult to capture.

“Even seemingly mild risks can slowly creep up or go otherwise undetected until reaching a troublesome level,” RIMS said, adding that the environmental, social and governance (ESG) movement was an example of a known risk that “can significantly and/or suddenly evolve in unexpected or dynamic ways”.