---
description: >-
  How an entity’s existing and emerging sustainability-related risks are
  identified, assessed, managed and mitigated.
---

# Risk Management

The risk management section of the GSRM Decentralized Application Rating System assesses how an entity's existing and emerging sustainability-related risks are identified, assessed, managed and mitigated, and whether those processes are integrated into existing risk management processes. The section covers the following parameters:\


* Contribution to global risks: This parameter measures the contribution of the entity to global risks based on the World Economic Forum Risk Report. This allows users of the rating system to understand the potential impact of the entity on global sustainability issues.
  * Contribution to global risks
    * Contribution to Global Risks based on World Economic Forum Risk Report&#x20;
      *   Example

          * Risk 1
          * Risk 2


* Industry Risk Exposure: This parameter measures the entity's industry risk exposure based on the SASB Framework. The framework charts the likelihood and impact of various industry risks, providing a comprehensive view of the entity's risk exposure in its respective industry.
  * Industry Risk Exposure
    * Industry Risk Exposure based on SASB Framework - Chart Likelihood and Impact
      * Example
        * Risk 1
        * Risk 2\

* Business Risk Exposure: This parameter measures the entity's business risk exposure based on publicly available information. The chart shows the likelihood and impact of various business risks such as Anti-money-laundering compliance, KYC compliance, measures against illegal activities, data security and privacy, and network security.
  * Business Risk Exposure
    * Business Risk Exposure based publicly available information - Chart Likelihood and Impact
      * Example
        * Anti-money-laundering compliance (AML) and terrorist financing
        * KYC compliance
  * Measures against illegal activities
  * Data Security & Privacy
  * Network Security
    * Business risk 1
