Project Risk Framework

Risk Category	Potential Risk Areas	What would constitute a "low risk" (e.g. score 1)	What would constitute a "very high risk" (e.g. score 5)
Political	Project governance	Clear and effective	Unclear and ineffective
	Local government	No involvement/passive	Active/Obstructive
	Reputational Issues	Standard build	High profile development
Economic	Schedule	Realistic	Aggressive/Unrealistic
	Raw Material Supply	Secured and predictable pricing	Uncertain and price volatility
	Local Wage Inflation	Low and static	High and volatile
Social	Stakeholder involvement	Non/passive	Active/Obstructive
	Demographics of the neighbourhood	Broad, with weak cultural influences	Concentrated, strong cultural influences
	Access by road/rail	Easy accessibility	Difficult to access site
Technology	Project complexity	Simple	Complex
	Project requirements and scope definition	Well Defined	Poorly Defined
	Technology	Standard	New/Unproven
Legal	3rd party permissions required	Minimal	Major Effort with Unclear Requirements
	Industrial Relations	Good	Militant Trade Unions
	Loan finance availability for buyers	Low interest rates, credit availability	High interest rates, credit tight
Environmental	Project location	Well known	Unknown, first presence
	Environment/Climate	Moderate	Harsh
	Environmental regulation	Easy to understand and comply	Complex and restrictive
Total Score (maximum 30)

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Low risk project

In this situation you can proceed with the project as planned. Although you will take all of the necessary precautions while engaging in the project, the project environment (PESTLE) appears to be well known and risks understood. Ensure stakeholders are kept in the loop during execution.

Medium risk project

Review the risk categories in your PESTLE rating/score that have higher scores. These categories will point towards potential challenges and risks in executing your project. Try to identify ways to reduce or eliminate these risks before proceeding. Communicate with stakeholders and your team to consider different approaches to respond to these risks.

Higher risk project

If your project reflects a higher risk profile, it is often good idea to revisit your project idea/concept and explore alternative options by applying some critical and creative thinking techniques. In such a situation, take time to rethink your approach and then re-do the PESTLE profile. Before proceeding with your project, it is advisable that you take sufficient time to engage with your team and broader stakeholders to identify appropriate risk responses to reduce the likelihood and impact of these risks on your project during execution.

High risk project

In a high-risk project, take a step back and consider all of the alternatives before making a decision to continue with the project. Should you decide to proceed, you will need to ensure that the identified high risks categories and items are adequately addressed and appropriate contingencies are in put into place. Such risks will require constant monitoring and review to ensure you remain on top of various mitigation actions. Good communication with your project team and other stakeholders is essential. Where the risk profile indicates an extremely high risk, one option might be to avoid the project entirely. Alternately, reconsider all of the planning and seek non-traditional approaches in order to consider the project in a different way, where risks might be better understood or where risks can be reduced - or for instance eliminated by transferring them to other parties (such as experienced contractors).

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