Non-financial risk (NFR) refers to the potential for losses arising from factors other than financial. These risks can come from a variety of sources, including failures in operational processes, environmental or climate issues, cybersecurity and regulatory changes.
Managing non-financial risk is crucial for maintaining the overall stability and reputation of an organisation.
Overview of non-financial risks (CA ANZ)
Non-financial risks include (but are not limited to):
- environmental risks (including climate-related risk)
- social risks (including understanding changing social norms)
- supply chain transparency and other supply chain risks
- health and safety risks
- technology risks (including business continuity)
- cyber security risks and data privacy breaches
- compliance failure
- misconduct