9.6 Environmental Risk Management
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the plans. It is mainly about consideration of treatment options and selection of the
most appropriate method for achieving the desired outcome (Mihelcic et al. 2014).
Treatment options should be proportionate to the significance of the risk, while
the treatment cost needs to correspond with potential benefits. Treatment options
include accepting the risk, avoiding the risk, reducing the risk, transferring the risk,
retaining the risk, and financing the risk.
Risk avoidance entails avoiding an activity that could pose a risk. Despite
avoidance appearing as the solution to all the risks, it also implies losing out on
potential gains that could be gained if one would have undertaken the risk. However,
for the sake of environmental sustainability, it is vital for businesses and entities
need to adopt avoidance as a way of minimizing risks.
Avoidance has been heralded as a challenging risk assessment measure.
Identify three reasons why avoidance is a challenge to businesses and society.
Contrarily, risk reduction entails the minimization of the severity of the likelihood of loss from happening. For instance, the design of sprinklers is to extinguish
a fire and minimize the loss that would have been caused by a fire. The method could
result in greater loss through damage of the water, thus making it highly unsuitable.
For example, halon systems for suppressing fire could mitigate that risk, but the
cost could be prohibitive. Halon systems are made of liquefied and compressed gas
that prevents fire from spreading through a chemical means or way that disrupts
combustion. Reducing risks implies striking a balance between the activity’s benefit
and the negative risk. Outsourcing could be a great example of risk reduction in
case the outsourcer could demonstrate a higher ability of managing and minimizing
risks. For instance, a city could outsource garbage collection to concentrate on city
development.
Identify other examples of outsourcing in real life, especially in business. Is
outsourcing effective in environmental risk assessment? Briefly explain.
Risk-sharing entails sharing the benefit of gain or burden of loss with another
party. Risk transfer usually refers to how one can transfer risk to another party
through outsourcing or insurance. Contrarily, risk retention entails the acceptance
of loss from a risk after it happens. It is an effective strategy for the small
risks, whereby the costs associated with insuring against the risk may be higher
over time compared to the cumulative losses sustained. Furthermore, the risk
management plan is crucial for the development of the appropriate countermeasures
for mitigating every risk. It requires adequate security controls for risk management.
207
the plans. It is mainly about consideration of treatment options and selection of the
most appropriate method for achieving the desired outcome (Mihelcic et al. 2014).
Treatment options should be proportionate to the significance of the risk, while
the treatment cost needs to correspond with potential benefits. Treatment options
include accepting the risk, avoiding the risk, reducing the risk, transferring the risk,
retaining the risk, and financing the risk.
Risk avoidance entails avoiding an activity that could pose a risk. Despite
avoidance appearing as the solution to all the risks, it also implies losing out on
potential gains that could be gained if one would have undertaken the risk. However,
for the sake of environmental sustainability, it is vital for businesses and entities
need to adopt avoidance as a way of minimizing risks.
Avoidance has been heralded as a challenging risk assessment measure.
Identify three reasons why avoidance is a challenge to businesses and society.
Contrarily, risk reduction entails the minimization of the severity of the likelihood of loss from happening. For instance, the design of sprinklers is to extinguish
a fire and minimize the loss that would have been caused by a fire. The method could
result in greater loss through damage of the water, thus making it highly unsuitable.
For example, halon systems for suppressing fire could mitigate that risk, but the
cost could be prohibitive. Halon systems are made of liquefied and compressed gas
that prevents fire from spreading through a chemical means or way that disrupts
combustion. Reducing risks implies striking a balance between the activity’s benefit
and the negative risk. Outsourcing could be a great example of risk reduction in
case the outsourcer could demonstrate a higher ability of managing and minimizing
risks. For instance, a city could outsource garbage collection to concentrate on city
development.
Identify other examples of outsourcing in real life, especially in business. Is
outsourcing effective in environmental risk assessment? Briefly explain.
Risk-sharing entails sharing the benefit of gain or burden of loss with another
party. Risk transfer usually refers to how one can transfer risk to another party
through outsourcing or insurance. Contrarily, risk retention entails the acceptance
of loss from a risk after it happens. It is an effective strategy for the small
risks, whereby the costs associated with insuring against the risk may be higher
over time compared to the cumulative losses sustained. Furthermore, the risk
management plan is crucial for the development of the appropriate countermeasures
for mitigating every risk. It requires adequate security controls for risk management.