What is the purpose of a risk impact assessment?

The purpose of a risk impact assessment is to rank risks based on their criticality, which is essential for effective risk management in any organization or project. This assessment helps identify and analyze potential risks, determining their possible effects on objectives, operations, or projects. Ranking risks allows stakeholders to prioritize which risks require immediate attention and resources. By systematically evaluating risks based on their severity and likelihood, organizations can develop appropriate strategies to mitigate them, ensuring better decision-making and resource allocation. This process ultimately contributes to the resilience and sustainability of the organization or project in the face of uncertainties.