Risk management in UNDP

Navigating through the complexity of multiple uncertainties is at the core of UNDP’s quest for innovative solutions to development and organisational challenges. UNDP’s Enterprise Risk Management policy (ERM) provides an overarching framework to ensure foresight and risk-informed decisions across all levels of the organisations, including all projects, to maximise gains and avoid unnecessary losses.

UNDP’s approach to risk management is based on the 2018 edition of the international standards for risk management, ISO 31000:2018 “Risk management – Principles and guidelines”. UNDP defines risk as the effect of uncertainty on organizational objectives, which could be either positive and/or negative.

In line with the ISO 31000:2018, the UNDP’s ERM methodology consists of 6 key elements, as per Figure 4 below. Each step is further detailed in the following sections of this guidance.

Figure 4. UNDP’s ERM methodology

Under the UNDP’s ERM umbrella, risk management is integrated through prescriptive UNDP’s policies and procedures which are designed to manage selected categories of risks. A visual guide of the UNDP ERM policy is available here and mapping of some key UNDP risk management tools and policies to guide risk assessment, treatment and monitoring along the UNDP’s risk categories is available here.

The UNDP’s Risk Appetite Statement (RAS) and the UNDP’s Risk Appetite Statement Guidance set UNDP’s internal preference regarding the level of risk to take in a given situation. The purpose of the RAS is to ensure consistent and effective understanding of the amount and type of risk UNDP is willing to accept to deliver on its strategic objectives. UNDP’s risk appetite across risk categories is summarised in Figure 5 below and these are expected to be consulted during the risk identification process and to guide the design of risk treatment actions.

Figure 5. UNDP’s Risk Appetite across UNDP’s risk categories