RISK MANAGEMENT

Risk Management

In finance and business, the term risk has several meanings. Sometimes it refers to the volatility of an investment or the likelihood that a certain use of money will cause unpredictable losses or gains. Financial risks managers are often responsible for investment strategy. In social science, natural science, and technical fields, risk is often viewed as an index of the severity of a particular harm and the chances it will adversely affect people or the environment. For instance, people can be helped by a new pesticide that keeps their crops from being eaten by pests, but pesticide use can be harmful if those applying it fail to follow instructions or if it is manufactured in an area that lacks the infrastructure to support production of complex products (Cannon, Davis, Wisner, 1994). It has been said that “Economists look at the world from a perspective of scarce resources, while actuaries are focused from a perspective of risk”

Risk management encompasses the activities dealing with risks after they are identified and evaluated. Risk management, as well as risk assessment and risk communication, are part of the comprehensive term of risk governance, which is a systematic approach toward coping with risks under participation of all relevant actors (government, companies, the scientific community, nongovernmental organizations, and the general public). Risk management starts as soon as there is sufficient evidence for hazards identified and evaluated by risk assessment. (Renn, 2008)

Risk management is also dealing with identified concerns that were analyzed by concern assessment based on risk perception studies, economy impact assessment, and the scientific characterization of social responses to risk source. At present, the production and use of engineered synthetic nanoparticles show high evidence of risks in several fields. There are particular concerns about the use of nanoparticles in feed and cosmetics. However, different nanotechnologies and specific applications require different risk management strategies. (Kasperson, 2000)

The first step of risk management is the identification and generation of risk management options. For example, these are measures to control or to reduce the release of nondeterministic polynomially (NP) problems, foster technological developments (filter technologies, etc.), implement economic incentives (taxation, duties, certification schemes), develop compensation schemes, generate knowledge, collect data (epidemiological studies, studies on work safety), and develop guidelines and best practice manuals. The dissemination of information about risks or the implementations of educational programs are also options for risk management. (Renn, 2008)

The second step is the assessment and evaluation of the risk management options. The criteria of this assessment are effectiveness, efficiency, minimization of external side effects, sustainability, fairness, political and legal implement ability, and ethical and public acceptability.

The ...