Systemic Risks from Different Perspectives

A multi-perspective process safety risk assessment with hybrid risks

In this paper, we assert that the process safety risks vary based on the identity of the stakeholders involved, for example, employees, management, regulators, community members, insurance companies, and environment. These risks differ in perceptions, magnitudes, and ramifications across an array of stakeholders. Hence, the process safety risk assessment taken from a single perspective, as is often the case, is inadequate and perhaps misleading. Instead, a more realistic approach is a multi-perspective risk assessment by considering the interactions existing among different perspectives and by building concurrent and compatible models explicitly. This marks the first innovation of the current research work. The second innovation centers on the hybrid nature of risk analysis. We recognize the distinction between safety risks impacting human well-being and risks affecting facilities, properties, capital assets, and the environment. The research introduces a hybrid safety-facility risk assessment to address different types of risks. Still, developing multiple models to represent hybrid risks from different perspectives is complex, time-consuming, tedious, and very costly. In addition, results from multiple models may become incompatible, confusing the stakeholders. To avoid such difficulties, a comprehensive model is developed initially, which, while impractical itself, allows for the extraction of practical perspective-based models through reduction. The methodology was illustrated and validated by examining a city gas pressure reduction station from 12 different perspectives, illustrating different risk results and highlighting the necessity of a multi-perspective and hybrid risk approach for accurate process safety risk analysis. However, the methodology is widely applicable across different risk assessment areas, not limited to the process safety of a city gate station (CGS). Furthermore, the twelve perspectives considered are specific to the context of the CGS case in a suburb of Tehran and may vary in other situations. By incorporating these practices, organizations can ensure a more comprehensive, inclusive, and accurate assessment of process safety risks, ultimately leading to better risk management and decision-making.

[Vaccines in Brazil in the pandemic: a study of public perception]

In a polarized and complex context, the COVID-19 pandemic has highlighted, vaccine hesitancy as one of several crises. Studies indicate a high intention to vaccinate in Brazil, but official data indicate insufficient vaccination coverage. In order to identify the perception and attitudes of Brazilians, an empirical study was carried out using the survey technique, totaling 2,069 household interviews with people aged 16 and over in urban centers from August to October 2022. To analyze the results, multivariate statistical techniques, factor analysis and regression models, were used. In general, respondents expressed a positive view of vaccines, but the survey results suggest that confidence in vaccines may be shaken. The level of education and scientific knowledge affect some of the attitudes of Brazilians towards vaccines. Indices were constructed considering values, trajectories, life context and habits of the interviewees. In addition to the region of residence and religion, gender parity indices, vision of the role of the State and trust in science provided relevant information, indicating the need for aligned communication strategies with different audiences considering the variables that impact the perception of vaccines.

Cybersecurity in the financial sector and the quantum-safe cryptography transition: in search of a precautionary approach in the EU Digital Operational Resilience Act framework

An ever more digitalised financial sector is exposed to a growing number of cyberattacks. Given the criticality and interconnectedness of this sector, cyber threats here represent not only operational risks, but also systemic risks. In the long run, the emerging cyber risks include developments in quantum computing threatening widely used encryption safeguarding digital networks. Globally in the financial sector, some initiatives have already been taking place to explore the possible mitigating measures. This paper argues that for an industry-wide transition to quantum-safe cryptography the precautionary principle is relevant. In the EU, financial entities now have to be compliant with the Digital Operational Resilience Act strengthening ICT security requirements. This research traces the obligation to adopt quantum-resistant precautionary measures under its framework.

Risk modelling of ESG (environmental, social, and governance), healthcare, and financial sectors

Climate change poses enormous ecological, socio-economic, health, and financial challenges. A novel extreme value theory is employed in this study to model the risk to environmental, social, and governance (ESG), healthcare, and financial sectors and assess their downside risk, extreme systemic risk, and extreme spillover risk. We use a rich set of global daily data of exchange-traded funds (ETFs) from 1 July 1999 to 30 June 2022 in the case of healthcare and financial sectors and from 1 July 2007 to 30 June 2022 in the case of ESG sector. We find that the financial sector is the riskiest when we consider the tail index, tail quantile, and tail expected shortfall. However, the ESG sector exhibits the highest tail risk in the extreme environment when we consider a shock in the form of an ETF drop of 25% or 50%. The ESG sector poses the highest extreme systemic risk when a shock comes from China. Finally, we find that ESG and healthcare sectors have lower extreme spillover risk (contagion risk) compared to the financial sector. Our study seeks to provide valuable insights for developing sustainable economic, business, and financial strategies. To achieve this, we conduct a comprehensive risk assessment of the ESG, healthcare, and financial sectors, employing an innovative approach to risk modelling in response to ecological challenges.

Managing and mitigating future public health risks: Planetary boundaries, global catastrophic risk, and inclusive wealth

There are two separate conceptualizations for assessing existential risks: Planetary Boundaries (PBs) and global catastrophic risks (GCRs). While these concepts are similar in principle, their underpinning literatures tend not to engage with each other. Research related to these concepts has tended to be siloed in terms of the study of specific threats and also in terms of how these are assumed to materialize; PBs attribute global catastrophes to slow-moving and potentially irreversible global changes, while GCRs focuses on cataclysmic short-term events. We argue that there is a need for a more unified approach to managing global long-term risks, which recognizes the complex and confounded nature of the interactions between PBs and GCRs. We highlight where the PB and GCR concepts overlap and outline these complexities using an example of public health, namely, pandemics and food insecurity. We also present an existing indicator that we argue can be used for monitoring and managing risk. We argue for greater emphasis on national and global ''inclusive wealth'' as a way to measure economic activity and thus to monitor and mitigate the unintended consequences of economic activity. In sum, we call for a holistic approach to stewardship aimed at preserving the integrity of natural capital in the face of a broad range of global risks and their respective regional or global manifestations.

Towards a future conceptualization of destination resilience: exploring the role of actors, agency and resilience narratives

Purpose

Despite the widespread use and application of resilience, much uncertainty about the conceptualization and operationalization in the context of tourism destinations still exists. The purpose of this paper is to provide a conceptual elaboration on destination resilience and to introduce a model for an improved understanding of the concept.

Design/methodology/approach

Taking a conceptual research approach, this paper seeks to untangle the fuzziness surrounding the destination and resilience concept by providing a new interpretation that synthesizes theories and concepts from various academic disciplines. It analyses the current debate to derive theoretic baselines and conceptual elements that subsequently inform the development of a new “Destination Resilience Model”.

Findings

The contribution advances the debate by proposing three key themes for future resilience conceptualizations: (1) the value of an actor-centered and agency-based resilience perspective; (2) the importance of the dynamic nature of resilience and the (mis)use of measurement approaches; (3) the adoption of a dualistic resilience perspective distinguishing specified and general resilience. Building on these propositions, we introduce a conceptual model that innovatively links elements central to the concepts of destination and risk and combines different narratives of resilience.

Originality/value

The contribution advances the debate surrounding destination resilience by critically examining the conceptualization and operationalization of destination resilience within previous research and by subsequently proposing a “Destination Resilience Model” that picks up central element of the three new frontiers identified in the conceptually driven review. The innovative integration strengthens the comprehension of the resilience concept at destination level and supports building future capacities to manage immediate adverse impacts as well as novel and systemic risks.

Out of sight but still in mind: Developing an expectation for surprises by formalizing unknowledge in a contemporary risk-assessment framework

Extreme events like the credit crunch, the September 11th attacks, the coronavirus pandemic, and Hamas' attack on Israel each have in common that they should not have come as a surprise, yet still did. One reason surprises happen is that a risk assessment reflects the knowledge of the assessors, yet risk also includes uncertainties that extend beyond this knowledge. A risk assessment is thus susceptible to surprises as it focuses attention on what is known. Developing an expectation for surprises is key to their avoidance and requires that risk assessors specifically consider their "unknowledge"-that is, what they do not presently know about an event, outcome, or activity and its potential consequences and triggers. One way to emphasize the need for risk assessors to consider unknowledge is to explicitly include it as a separate component in risk-assessment frameworks. This article formalizes the inclusion of unknowledge in a contemporary risk-assessment framework.

Monitoring flood risk evolution: A systematic review

Land-use change, climate change, human interventions, and socio-economic developments influence the evolution of the risk components hazard, exposure, and vulnerability, and consequently of flood risk. Adaptive flood risk management is a way to cope with evolving risks, but it requires measuring the evolution of risks. To develop principles of flood risk monitoring, we systematically reviewed scientific literature on flood risk evolution analyses. The reviewed publications indicate a wide spread in increase or decrease of flood risk evolution over decades. Furthermore, the publications show a high diversity in factors and methods for flood risk evolution analysis and indicate the main challenges for developing flood risk monitoring. Flood risk monitoring needs the systematic detection of flood risk evolution by periodically (re)evaluate the factors that influence the risk components-hazard, exposure and vulnerability-modeling those risk components and combining them to quantify flood risk.

The synergy effect of multi-country policy actions announced in reaction to global risk: A network structure perspective

The policy actions of countries reflect adaptive responses of local components within the system to the dynamic global risk landscape. These responses can generate interactions and synergy effects on alleviating the evolution of global risks. Adopting a network perspective, the study proposes a theoretical framework that connects three structural characteristics of policy synergy, namely, synergy scale, alignment intensity, and timing synchronization. Focusing on the Covid-19 pandemic as a typical global risk context, the study finds that policy synergy with a larger scale, stronger alignment intensity, and more synchronized timing has a positive impact on mitigating global risks. The effect of alignment intensity is particularly pronounced when polycentric governance involves 20 countries facing severe risks, whereas the effect of timing synchronization is more significant when the multicenter group comprises more countries. Building upon the concept of an efficient scale of polycentric governance in various dimensions, this study develops a policy synergy index model. Through multiple empirical analyses, this study validates the causal relationship between policy synergy and the future evolution of global pandemic risk. Policymakers can leverage the dynamic changes in the policy synergy to predict future risk situations and implement well-rounded and appropriate policy actions, thereby enhancing the efficacy of the synergy effect of multi-country policy actions for risk governance.

On the interconnected nature of risk and responsibility in the research and development of new and emerging technologies

Risk analysis of new and emerging technologies requires innovative approaches that are agile, exploratory, and can accommodate broad stakeholder engagement and perspectives. Existing theories of risk governance and responsible innovation suggest that operationalizing guiding principles for engagement such as inclusion and reflection may provide a useful approach to the risk analysis of these technologies. Yet, methodologies to systematically assess how we might operationalize such guiding principles in risk analysis are limited in existing risk research. We contribute to filling this gap by demonstrating a practical methodology for examining and documenting how research and development (R&D) professionals operationalize inclusion and reflection in risk analysis and what value this provides to risk analysis in the R&D context. We use the Australian nanotechnology R&D sector as our case study, interviewing 28 experts to examine how R&D professionals have operationalized inclusion and reflection into their risk analysis practices, generating three findings. First, we describe how our research design enables the successful translation of theory into a methodology that supports an empirical assessment of the integration of these guiding principles into risk analysis practice. Second, we argue that successfully and systematically integrating inclusion and reflection in risk analysis fosters a wider understanding and identification of risk through the activation of multi-actor and multi-institutional stakeholder engagement processes. Third, we outline how this research depicts the outward-facing and introspective nature of risk analysis.

Revealing indirect risks in complex socioeconomic systems: A highly detailed multi-model analysis of flood events in Austria

Cascading risks that can spread through complex systems have recently gained attention. As it is crucial for decision-makers to put figures on such risks and their interactions, models that explicitly capture such interactions in a realistic manner are needed. Climate related hazards often cascade through different systems, from physical to economic and social systems, causing direct but also indirect risks and losses. Despite their growing importance in the light of ongoing climate change and increasing global connections, such indirect risks are not well understood. Applying two fundamentally different economic models-a computable general equilibrium model and an agent-based model-we reveal indirect risks of flood events. The models are fed with sector-specific capital stock damages, which constitutes a major methodological improvement. We apply these models for Austria, a highly flood exposed country with strong economic linkages. A key finding is that flood damages pose very different indirect risks to different sectors and household groups (distributional effects) in the short and long-term. Our results imply that risk management should focus on specific societal subgroups and sectors. We provide a simple metric for indirect risk, showing how direct and indirect losses are related. This can provide new ways forward in risk management, for example, focusing on interconnectedness of sectors and agents within different risk-layers of indirect risk. Although we offer highly relevant leverage points for indirect risk management in Austria, the methodology of analyzing indirect risks can be transferred to other regions.

Smart cities at risk: Systemic risk drivers in the blind spot of long-term governance

In this article, we analyze "digital massification" in smart cities, that is, an ever-growing number of market participants, consumers, and Internet of Things devices with simultaneous accommodation of users to increasing disturbances and inconveniences due to data congestion-as a driver for systemic risk. We argue that digital massification phenomena largely escape societal awareness due to their protracted evolution and are therefore still in the blind spot of long-term governance. Our analysis makes methodological use of historical and relational analogy, and we introduce and elaborate concepts and terms that allow us to discuss the evolutionary nature of massification, that is, the foreseeable increasing probability of the occurrence of trigger events. Using the analogy to the history of road traffic congestion, we deduce that digital massification will most likely lead to a future "risk transition" where tolerated disturbances and inconveniences of the present will turn into systemic impacts. This insight calls for heightened sensitivity in governance to massification phenomena to ensure the long-term resilience of smart cities.

Toward a framework for systemic multi-hazard and multi-risk assessment and management

In our increasingly interconnected world, natural hazards and their impacts spread across geographical, administrative, and sectoral boundaries. Owing to the interrelationships between multi-hazards and socio-economic dimensions, the impacts of these types of events can surmount those of multiple single hazards. The complexities involved in tackling multi-hazards and multi-risks hinder a more holistic and integrative perspective and make it difficult to identify overarching dimensions important for assessment and management purposes. We contribute to this discussion by building on systemic risk research, especially the focus on interconnectedness, and suggest ways forward for an integrated multi-hazard and multi-risk framework that should be beneficial in real-world applications. In this article, we propose a six-step framework for analyzing and managing risk across a spectrum ranging from single-to multi- and systemic risk.

Sustainable Development Goals and risks: The Yin and the Yang of the paths towards sustainability

The United Nations 2030 Agenda and Sustainable Development Goals (SDGs) define a path towards a sustainable future, but given that uncertainty characterises the outcomes of any SDG-related actions, risks in the implementation of the Agenda need to be addressed. At the same time, most risk assessments are narrowed to sectoral approaches and do not refer to SDGs. Here, on the basis of a literature review and workshops, it is analysed how SDGs and risks relate to each other's in different communities. Then, it is formally demonstrated that, as soon as the mathematical definition of risks is broadened to embrace a more systemic perspective, acting to maintain socio-environmental systems within their sustainability domain can be done by risk minimisation. This makes Sustainable Development Goals and risks "the Yin and the Yang of the paths towards sustainability". Eventually, the usefulness of the SDG-risk nexus for both sustainability and risk management is emphasized.

Impact of COVID-19 on the Health Response to Family Violence in Aotearoa New Zealand: A Qualitative Study

COVID-19 pandemic planning and response has resulted in unprecedented upheaval within health systems internationally. With a concern for increasing frequency and escalation of family violence, the so called "shadow pandemic," we wondered how health system violence intervention programs were operating during this time. In Aotearoa New Zealand, the Ministry of Health Violence Intervention Program (VIP), using a systems approach, seeks to reduce and prevent the health impacts of family violence and abuse through early identification, assessment, and referral of victims presenting to designated health services. In this qualitative descriptive study, we explored how the VIP program was impacted during the first year of the COVID-19 pandemic. Forty-one VIP coordinators and managers representing 15 of the 20 New Zealand District Health Boards and the National VIP Team participated. Across 12 focus groups (8 face to face and 4 via Zoom) and 7 individual interviews (all via Zoom) participants shared their experience navigating systems to support frontline health providers' responsiveness to people impacted by family violence during the pandemic. In our reflexive thematic analysis, we generated 3 themes: Responding to the moment, valuing relationships, and reflecting on the status quo. Our findings demonstrate the dynamic environment in which participants found creative ways to adapt to the uncertainty and engage with communities to re-shape interventions and ensure continued implementation of the program. At the same time, challenges within the system prior to the pandemic were brought into view and highlighted the need for action. These included, for example, the need for improved engagement with Māori (Indigenous people of Aotearoa New Zealand) to address long-standing health inequities. Having quality essential services for those impacted by family violence that engages with local knowledge and networks and routinely copes with uncertainty will strengthen our systems to minimize risk of harm during emergencies.

Conversion strategy builds supply chain resilience during the COVID-19 pandemic: A typology and research directions

This study proposes a novel typology of adaptation to hazards-a conversion strategy as a countermeasure to manage risks in interconnected supply chains. Conversion strategies are intended to transform one or multiple supply chain functions for a different one to manage the changing environment. Supply chain disruptions due to natural hazards have been researched in key manufacturing-based economies like Thailand, the US, Japan, and China. Limited studies, however, have looked at the nature of interconnected risks and its effective countermeasures that arise when the COVID-19 pandemic disrupt supply chains. Here, we examine systemic risks by contrasting supply chain disruptions caused by natural hazards and the pandemic. Our study investigates whether businesses can manage systemic risks brought on by the pandemic by learning from dealing with disruptions caused by natural hazards. We offer a typology of conversion strategies to demonstrate how conversion strategies can be a successful response to pandemic scenarios. Specifically, we propose six conversion types: production location, production line, storage, usage, distributional channel, and workforce skill set. Then, we conclude with the future research directions as well as the kinds of policy supports required to assist businesses in implementing conversion measures by drawing on prior work addressing natural hazards.

Risk-layering and optimal insurance uptake under ambiguity: With an application to farmers exposed to drought risk in Austria

Many risks we face today will very likely not stay the same over time. For example, it is expected that climate change will alter future risks of natural disaster events considerably and, as a consequence, current risk management and governance strategies may not be effective anymore. Large ambiguities arise if future climate change impacts should be taken into account for analyzing risk management options today. Risk insurance, while albeit only one of many risk management actions possible, plays an important role in current societies for dealing with extremes. A natural starting point for our analysis is therefore the question of how ambiguity may be incorporated in a world with changing risks. To shed light on this question, we study how ambiguity can affect the uptake of insurance and risk mitigation within a risk-layer approach where each layer is quantified using distortion risk measures that should reflect the risk aversion of a decisionmaker toward extreme losses. Importantly, we obtain a closed-form solution for such a problem statement which allows an efficient numerical implementation. We apply this model to a case study of drought risk for Austrian farmers and address the question how ambiguity will affect the risk layers of different types of farmers and how subsidies may help to deal with current and future risks. We found that especially for small-scale farmers the consequences of increasing risk and model ambiguity are pronounced and subsidies are especially needed in this case to cover the high-risk layer.

Developing Indicators to Improve Safety and Security of Citizens in Case of Disruption of Critical Infrastructures Due to Natural Hazards—Case of a Snowstorm in Finland

The changing climate inflicts ecological, economic, social, and cultural consequences that are interconnected and mutually reinforcing. Very often, this happens via interlinked critical infrastructures. Preparing these for natural hazards and carrying out risk assessments that consider their cascading effects on human livelihoods and well-being is a challenging task. Crisis management institutions can benefit from forecasts based on the idea of systemic risk. This study is based on stakeholder workshops, in which a systemic dynamic modelling method called the Causal Loop Diagram (CLD) was used to support contingency planning to identify the critical infrastructure-related factors, the vital functions in society, and to understand their interrelated nature. Together with the workshop participants (authorities and other service providers of critical infrastructures) we tested whether the CLD tool could help identify three types of indicators (threat factors, vulnerability, and resilience) that can help in assessing the risk level when a natural disaster hits. Our case study was a snowstorm, still a frequent phenomenon in the Nordic countries. This article describes and explains the possibilities and limitations of systemic dynamic modelling in contingency planning. Indicators describing the safety and security risks posed by natural hazards, as well as potential sources of data for these indicators, were identified. Identifying indicators that are relevant for anticipating interrelated and cascading effects offers valuable tools for risk assessment and security planning at operational and strategical levels.

Social Perception of Systemic Risks

The article distinguishes between two types of risks: conventional and systemic risks. Conventional risks can be contained in space and time, follow linear cause-effect relationships and can be addressed with effective and pointed interventions into the cause-effect chain. Systemic risks, however, are characterized by high complexity, transboundary effects, stochastic relationships, nonlinear cause-effect patterns with tipping points, and are often associated with less public attention than they require. The article addresses the reasons why systemic risks seem to be attenuated in public perception. The article goes on to consider how the social amplification of risk framework is useful in the context of systemic risks and describes needed extensions of that framework. It identifies practical tools for assessing the significance of perceptions for systemic risk situations. Finally, it argues that a graphic representation and simulation of evolving systemic risks and potential countermeasures as well as a participatory deliberative approach of inclusive risk governance are suitable governance strategies for preventing, mitigating, or managing systemic risks.