Introducing risk communication

The terms risk communication and crisis communication are often jointly or interchangeably used. There is, however, a significant difference in meaning. In this article, we will have a look at the difference between both terms and focus more specifically on the notion of risk communication and its use cases.

RISK COMMUNICATION VS CRISIS COMMUNICATION

Risk communication is the proactive exchange of information, behaviours, and opinions about perceived or identified risks with stakeholders. The overall aim is to find ways, through communications, to minimise the risks attached to a hazard. The accident at the chemical plant in the Italian town of Seveso is an excellent example of the past in the field of risk prevention and communication. The accident caused the release of large quantities of toxic chemicals and contaminated the surrounding municipalities, including the town of Seveso. The event led the European Union to adopt the ‘Seveso’ Directive in 1982, and to introduce a common policy on the prevention of major industrial hazards. The directive aimed to prevent major accidents involving dangerous substances and limit their consequences for the health and safety of people, as well as for the environment. Since then, authorities in the member states have been obliged to ensure adequate preparation and response in the event of an industrial accident, which includes meaningful communication on potential risks. By being well-informed and by correctly informing stakeholders and the population, you can limit the consequences of an emergency situation and react correctly in the first moments, which are always crucial.

Let’s stop here and make sure we differentiate between the terms we use:

• If something has the potential to cause harm, we consider it an hazard;
• A risk is the chance or probability that any hazard will actually cause harm;
• When a sudden unforeseen hazard event with natural, technological, or social causes leads to destruction, loss and damage, we begin to talk about a disaster;
• When we face a time of great danger, difficulty or doubt where problems must be solved or important decisions must be taken, we have reached a crisis.

Crisis communication is the overall strategy that an organisation deploys to respond to any difficult issue or business disruption that also calls into question the company’s reputation or threatens to undermine employee or customer confidence in the organisation. Usually, crisis communication deals with immediate response and management of unforeseen situations. A quick, factual and transparent communication is key. Risk communication in return has a preventive and informative function.

RISKS WITHIN AN ORGANISATION

Risks are a part of reality in any organisation. In today’s world, organisations are increasingly aware of corporate social responsibility on environmental, social and governance issues, the latter including the notions of risk management. The importance and sensitivity of dealing with risks has therefore grown significantly. Here again, we need to differentiate:

• Risk assessment, the screening and assessment phase which determines the frequency and severity of risks;
• Analysis of risk perception and risk communication;
• Analysis of risk management;
• Risk governance, the mechanisms by which risks are evaluated and implemented within an organisation.

WHY CONSIDER RISK COMMUNICATION?  

The purpose of risk communication is to help people understand and manage risks. It involves sending messages about risks and risk management to different audiences, such as the media, the general public, employees, or clients. Here are the most important objectives in risk communication:

• Raise awareness
• Inform to build up knowledge on hazards and risks
• Define uncertainty in risk assessment context
• Promote acceptance of risks and management measures
• Inform on how to behave during events
• Stay in dialogue with all affected stakeholders, define acceptable levels of risk and define applicable measures
• Build trust

TYPES OF RISK

• Hazard Risks: This category contains liability suits, property damage, natural disasters, crime, work-related injuries, and business interruption
• Financial Risks: This category contains price risk, liquidity risk, credit risk, inflation risk, and hedging risk
• Operational Risks: This category contains operational risk, empowerment risk, IT risk, integrity risk, and business reporting risk
• Strategic Risks: This category includes competition, customer risk, demographic and cultural risk, innovation risk, capital availability, regulation, and political risk
• Compliance risks: complying with rules and regulations
• Reputational risk: “soft term” but with major business implications

GUIDING PRINCIPLES

You might ask, how do we reach these objectives of risk communication effectively? The answer lies with the “6 As” of risk communication, which are:

1. Assembling the evidence
2. Acknowledgement of public perceptions
3. Analysis of options
4. Authority in charge
5. Audience interaction
6. Assess effectiveness

At every of these steps there are some key principles to respect. Proactiveness, transparency, accountability and maintain continuous dialogue. Without these guiding principles, communication quickly becomes ineffective, and can eventually even harm more than it will do good.

THOUGHTS ON RISK COMMUNICATION

Risk communication remains a little known, or maybe little understood, segment in communications and public relations. However, the follow-up and evaluation of crisis responses provides an opportunity to also improve risk communication, ahead of any scenario. On top of that, risk communication in smaller organisations or settings tends to be underestimated and neglected, as the presumption is that anyhow the effect and damage would be on a limited scale.

Yet by nature, risks have unpredictable outcomes, and if there is one central truth of risk communication, this is it:

“Watch out!” and “Stop worrying” are both messages that fail more often than they succeed. – Peter Sandman