Annex 2: Examples of risk per risk category
UNDP Risk Categories include the following: (1) Social and Environmental, (2) Financial, (3) Operational, (4) Organizational, (5) Political, (6) Regulatory, (7) Strategic, and (8) Safety and Security.
1. Category 'social and environmental' refers to so-called 'risks from' group, meaning, risks the project might cause to its social and environmental context.
| Causes | Event | Impact |
| flood risk consideration is not factored in project design | Sections of critical infrastructure (e.g. hospital) developed within the project might be subject of heighted flood risk after the project completion | Exposure of assets and people to flood Additional costs for flood protection measures Reputational consequences |
2. Category 'financial' refers to so-called 'risk to' group, meaning risks to financial soundness of the project, programme, organization as a whole.
| Causes | Event | Impact |
Delays in funds transfer Misinterpretation of roles and responsibilities between project partners | Project delivery (i.e. budget utilization %) might be below expected by the end of the year | Uncomplete project realization Reputational consequences Financial losses |
3. Category 'operational' refers to so-called 'risk to' group, meaning risks to the UNDP's operations (in UNDP terminology – projects and programmes) at country level, burau level, or corporate level. The range of sub-categories varies to capture the most important typology of risks.
| Causes | Event | Impact |
Continuous reforms within the organization Uncertainty about new roles and responsibilities Uncertainty about administrative procedures | Transition period might cause higher level of uncertainty within project, programme, organization at large | Organizational performance below optimal Staff morale negatively impacted Reputational consequences |
4. Category 'organizational' refers to so-called 'risk to' group, meaning risks to project, programme, and organizational performance but those related to the specific processes that ensures organizational effectiveness, i.e. governance within UNDP, or knowledge management, or internal control measures, etc.
| Causes | Event | Impact |
Outdated HR policies Lack of flexibility in HR procedures Human mistakes in processing Overloaded HR staff | Time required for the staff recruitment might hamper project, programme implementation | Delays of start of the project Reduced time for delivering project activities and results Quality of project deliverables negatively impacted Negative impact on donor's trust Possible financial losses within the project Reputational consequences |
5. Category 'political' refers to so-called 'risk to' group, meaning risks to project, programme, and organizational effectiveness that are external and caused by changes in the political context where the project, programme, and organization is placed.
| Causes | Event | Impact |
| Change in the government due to election | Political will of the government in engaging in climate change mitigation and adaptation strategies and activities might be deteriorated | Pipeline projects put on-hold Revision of UNDAF/CPD Financial losses Reputational impact |
6. Category 'regulatory' refers to so-called 'risk to' group, meaning risks to project, programme, and organizational effectiveness caused through a change either in the regulatory framework in the country of operation, or international laws, or the internal rules and policies within UNDP itself.
| Causes | Event | Impact |
| Adoption of new law on issuing temporary visas for foreigners | Changes required on how UNDP Country Office contracts international consultants might delays recruitment in the next 6 months | Delays in project and programme deliverables Reputational consequences Financial consequences |
7. Category 'safety and security' refers to so-called 'risk to' group, meaning risks to projects, programmes, and organization as a whole related to changes in the safety and security context around them.
| Causes | Event | Impact |
| Recurrent events of civil unrest in province A in country B since March 2018 | Access to project site in province A might be limited | Security of the project staff traveling to that location might be deteriorated |
