Risk Management for Projects: Risks and Issues in Environmentally Sensitive Projects

Risk Management for Projects

In the early stages of project planning, preparing for risk and issue management needs to be a key part of the process.

These steps are especially important should your company be a part of the energy, vehicle, utilities, natural resources or any other environmentally sensitive industry. In fact, almost all projects now involve some risk assessment as we are all aware of the environmental impact our businesses have. We will delve into the importance of risk management for intended sustainable projects and what project managers can do to be involved.

Risk vs Issue: What’s the Difference?

Before you can put effective risk management strategies into place, it’s important to understand the difference between risk and issue. A risk is something which could positively or negatively affect a project, while an issue is something that is currently negatively affecting the project. Essentially, a risk may happen and could have a good or bad outcome, an issue is happening now and can only have a negative impact. 

When you assess the scope of a project and create a consolidated project management plan, it’s important to consider the risks that could arise. Successful risk management allows you to identify both intrinsic and extrinsic factors that could affect outcomes and put actions in place, where necessary. Risk management is simply about minimising threats and maximising opportunities.

If an issue does occur, comprehensive risk management planning will mean that you may already have a strategy in place to deal with the issue, if it’s been previously identified as a threat. You can simply move the threat from the risk register to the issue log so that it is resolved swiftly and appropriately. 

What Are Risk Factors for Environmentally Sensitive Projects?

Businesses are under increasing pressure to minimise their negative environmental impact and reduce their carbon footprints. As companies face new regulations on the control of Scope 1, 2 and 3 carbon emissions, B2B clients are eager to reduce their own environmental liabilities by doing business with other firms that have successful sustainability strategies in place. Similarly, environmental sustainability is becoming a top priority for consumers, which means that B2C businesses must also take steps to improve their environmental credentials if they want to retain or grow their market share. 

Common impacts of project risks include increased costs, scope creep and operational changes, but there are additional risk factors to consider when you’re managing environmentally sensitive projects. A construction project could raise environmental risks, such as increased air and noise pollution, disruption of biodiversity and water pollution, for example. Similarly, if a vehicle manufacturer wants to release a new product, whole-life CO2 emissions and materials provenance will be sources of considerable environmental risk that will need to be fully assessed across the whole supply chain. 

Putting Environmental Risks into a Business Context

No one should actively want to harm the environment but, in the past, many businesses have been guilty of prioritising other objectives, such as financial performance, above environmental sustainability. Now however, environmental sustainability is more closely linked to a company’s commercial success, where ethics and values are more prominent, which is why it’s important to put environmental risks into a business context. 

When using a programme management framework to conduct risk and issue management, remember to consider the impact of risks and issues on numerous stakeholders. If a new vehicle design causes potentially significant environmental harm during its manufacture or supply, for example, it could attract financial sanctions that the business must account for and reputational harm arising from eco-conscious consumers. 

As you begin to identify environmental risks and consider their business impact, it becomes clear that environmentally sensitive projects must be handled extremely carefully to avoid unnecessary negative risks and issues arising.

Implementing Risk Management

If risks come to fruition (and if threats become ‘issues’), they can have a significant impact on the success of the project. Due to this, risk and issue management is a critical, dynamic element of ongoing project management. As risks are essentially opportunities that may enhance our project performance or threats that could undermine performance, you can begin the process by conducting a detailed risk analysis and using this to underpin your pro-active risk management strategy


Firstly, it’s necessary to identify risks that could impact the project and its outcomes. Here, a broad approach can be taken to ensure that all potential risks are correctly identified. For environmentally sensitive projects, particular risks pertaining to sustainability, corporate social responsibility (CSR) and environment, social and governance (ESG principles) should be given appropriate attention. Using the “PESTLE” approach as a prompt, this can help focus on risks of different categories, and have the appropriate subject matter experts involved.


During the assessment phase of risk management, you’ll carry out a risk analysis to determine how and where your project is most vulnerable or where opportunities may arise. Risk events should be clearly defined so that their potential impact, probability and timescales can be properly assessed and accurately calculated, along with overall project risk. 

Response Planning

Now that you know which risks pose the most threat or present the best opportunities to your project, you can begin to plan responses that can be implemented if the risk occurs in the future. By having a contingency plan in place from the outset, you’ll be far more prepared to deal with threats that do arise and potentially become issues, as the project is underway. You may also have plans in place to maximise an opportunity, such as setting aside funds to kick-start investment in a technology development that could improve the environmental credentials of the project, its deliverables and the organisations involved.

Furthermore, assigning a particular individual to take ownership of specific risks and response plans will ensure they have an in-depth understanding of the risk and the need for resolution, if or when it arises. 

Managing Issues Throughout a Project

When an issue occurs, it’s usually necessary to take action quickly to minimise the negative impact it could have on the project. However, effective risk management will mean that you may have already identified this as a risk and will have a response plan ready. If so, you can simply detail the event in the issue log, implement the response plan and proceed with the project.

Of course, there are times when issues arise that have not been identified in earlier risk management processes. When this happens, the issue should be analysed to determine its current impact, potential future effects and escalation level. From here, suitable response plans should be devised and implemented quickly, to minimise disruption to the project. 

Enhancing Your Risk Management Skills

All companies undertake some form of risk management and environmental risk is becoming increasingly important to all types of businesses. As a result, there is an ongoing demand for project managers with experience and expertise in risk management. With Provek’s APM Project Management training, you can enhance your risk management skills, optimise your performance and deliver increased value. To learn more, contact our friendly team now on 01635 524 610 or email us at enquiries@provek.co.uk.

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