"Emerging risks: between what we know and what we are only beginning to understand"

A while ago I read a paper that tackles one of the most interesting (and at the same time most complex) problems in risk management: the difficulty of identifying and defining emerging risks.

The state of the art in risk management has been incorporating this concept more strongly. However, as it gains relevance, it also becomes more blurry and harder to pin down in practice.

And that's where the real challenge begins.

📌 What is an emerging risk really?

For some, an emerging risk is defined as:

• A completely new risk
• A known risk that is only now being identified
• A risk whose impact or likelihood is increasing
• A risk that is beginning to be relevant for decision-making

This diversity of definitions is not trivial. In fact, the literature shows that there is no single, consistent definition, despite the widespread use of the concept. [1]

Even so, the paper proposes an idea that, in my view, is especially powerful:

An emerging risk is one in which the background knowledge is weak, but there are indications or justified beliefs that a new event could occur and generate relevant consequences. [1]

🧠 The key is not the risk… it's the knowledge

What struck me most in this reading is that the concept of emerging risk does not revolve solely around the event itself, but around the level of knowledge we have about it.

This completely changes the way we should approach them.

In simple terms:

• If we know a lot → known risk
• If we know nothing → total uncertainty
• If we know little, but there are signals → 👉 emerging risk

The problem is that "we know little" is exactly the most uncomfortable zone for management.

⚫ And what about Black Swans?

The paper also connects emerging risks with the famous black swan type events.

And here there is a distinction worth gold:

• Emerging risks relate to what we know we don't know (known unknowns)
• Black swans relate to what we don't even know we don't know (unknown unknowns) [1]

In other words:

• In emerging risks there are signals (even if weak)
• In black swans, those signals are simply not in sight

🔍 The real challenge: spotting weak signals

In practice, working with emerging risks means developing the ability to detect:

• Subtle changes in the environment
• Incipient trends
• Atypical behaviors
• New technological or regulatory dynamics

These signals rarely come with complete data or clear models. And that's the challenge: making decisions with incomplete but meaningful information.

🧩 A reflection from experience (what the paper doesn't say)

Here I want to close with a very personal reflection, based on practice.

In my experience, there are at least three elements that help bring the concept of emerging risk down to earth in organizations:

1. The time horizon matters

Not every weak signal is equally relevant.

An emerging risk should be analyzed considering how far or near the horizon is in which it could materialize.

This helps to prioritize and avoid overloading management with signals that are still too immature.

2. The impact is not exact (but it can be approximated)

It is very hard to quantify the impact of an emerging risk precisely.

But that doesn't mean it can't be managed.

In practice, it is useful to work with orders of magnitude of impact, which allows you to:

• Compare risks
• Prioritize them
• Integrate them into decision-making

3. Not everything is a threat: there are also opportunities

Something rarely mentioned is that an emerging risk should not be seen solely as something negative.

In fact, it can represent:

• New lines of business
• Innovation
• Competitive advantages

That's why it's key to enable its analysis both as a threat and as an opportunity.

✅ Conclusion

An emerging risk is not simply a "new risk".

It is a concept that lives on the frontier between knowledge and uncertainty.

And understanding it well means accepting that:

• We will not always have complete data
• We will not always be able to quantify with precision
• But we can recognize signals and act with judgment

In an increasingly complex environment, that ability can make an enormous difference to the resilience of any organization.

📚 Reference

Flage, R., & Aven, T. (2015). Emerging risk – Conceptual definition and a relation to black swan type of events. Reliability Engineering & System Safety, 144, 61–67. [1]