ERM Tool: Using PESTLE Analysis to Identify Potential External Risks

While risks can emerge internally from within the operations of the organization, some of the most significant risks are triggered by events external to the organization. Often it’s the external risks that are least managed, given the root causes of those risks are outside the organization’s control.

One tool that can be helpful in fostering robust conversations about emerging risks is a PESTLE Analysis, which provides a framework for considering risks that may be triggered by political, economic, social, technological, legal, and environmental factors.

The tool prompts business leaders to look at how external developments along each of the PESTLE factors may be emerging that could impact the organization’s business model and strategic objectives.

For more tools and templates, visit our ERM Resource Center.