Annex 3: Risk Management Framework Risk Category

8/14/2019 Annex 3: Risk Management Framework Risk Category

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Annex_3_Risk_management_framework_NOV_09_FINAL.doc

Annex 3: Risk management frameworkRisk category = Strategic, Governance, Financial, People | Level of impact = Goal, Purpose, Strategic Objective 1, 2 or 3

RISK RATING (H,M,L)EXTERNAL RISK RISKCATEGORY LEVEL OFIMPACT LIKELIHOOD IMPACT

1. Fairtrade is not able to access, participate and/or be adequately represented in policy makingdiscourses for global trade

Strategic Goal M H

EXISTING MITIGATING FACTORS (EXTERNAL) EXISTING MITIGATING FACTORS (INTERNAL)

- Growing recognition of Fairtrades importance in international trade discourses- Regular participation of Fairtrade in international fora- Increasing number of partnerships with key international institutions

- Strategy and Policy Unit work on position papers etc.

ACTION (PRE-EMPTIVE)

-Development of partnerships approach to engage with key international actors

RISK RATING (H,M,L)EXTERNAL RISK

RISKCATEGORY

LEVEL OFIMPACT

LIKELIHOOD IMPACT

2. Support for Fairtrade within global trade discourses does not reach the critical mass necessaryto drive changes in conventional trade

Strategic Goal M H


- Growing recognition of Fairtrades importance in international trade discourses

-

- Strategy and Policy Unit work on position papers etc.

-Increased engagement with Fair Trade Advocacy Office


- Ongoing work in policy, brand communication, impact assessment- Development of partnerships approach to engage with key international actors


RISKCATEGORY

LEVEL OFIMPACT LIKELIHOOD IMPACT

3. Consumer support for Fairtrade is not strong enough to ensure Fairtrade principles are includedin international trade agendas

Strategic Goal L H

EXISTING MITIGATING FACTORS (EXTERNAL) EXISTING MITIGATING FACTORS (INTERNAL)- Consistently growing consumer support -


- Strategic focus on business- and consumer-facing functions, e.g. Global Account Management, Global Product Management- Development of new markets strategy to expand Fairtrades international market presence


RISKCATEGORY



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4. Spill-over effects to non-Fairtrade-certified producers are not proven, thus limiting Fairtradesimpact

Strategic Goal L H


- Evidence from impact studies showing positive spill-over effects, particularly when Fairtradesales reach 30% of exportable production

- Strong business and consumer interesting Fairtrade, enhancing the likelihood of producersreaching 30% threshold

- Increasing number and quality of impact studies


- Strategic focus on increasing the percentage sold on Fairtrade terms


RISKCATEGORY


5. Engagement with major market partners does not lead to their promotion of changes toconventional trading practices

Strategic Goal M M


- Consistently stronger commitment by major market partners means Fairtrade principles arebecoming more widely adopted

-


- Global Account Management function aims to increase industrys commitment to Fairtrade assumption that this will lead to market partner promotingFairtrade principles


RISKCATEGORY


6. Growth in Fairtrade negatively influences grassroots campaigning capacity Strategic Purpose L M


- - Existing grassroots campaigns- Strong links with NGOs, ATOs and 100% Fairtrade

companies


- Expansion of grassroots campaigns like Fairtrade towns- Focus on maintaining close links with NGOs, ATOs and 100% Fair Trade companies in Fairtrade governance.


RISKCATEGORY


7. Consumer demand does not match Fairtrades ambition Strategic Purpose L H


- Consumer demand consistently growing, even during economic crisis - LI consumer-facing activities


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- Commitment from major market partners- Consumer interest in broader Fairtrade product range


- Increased investment in consumer awareness-raising- New product development- New market development


RISKCATEGORY


8. Facilitating more producer ownership of Fairtrades development outcomes does not translateinto a louder voice for Fairtrade in development discourses

Strategic Purpose L H


- Strong interest of key development actors to engage with Fairtrade - LI consumer-facing activities


- Focus on developing strategic partnerships with key development actors

RISK RATING (H,M,L)INTERNAL RISK

RISKCATEGORY


1. Consensus is not reached for major decisions within Fairtrade Governance Strategicobjective 1

L H

EXISTING MITIGATING FACTORS (EXTERNAL) EXISTING MITIGATING FACTORS (INTERNAL)- - Significant achievements during Strategic Review process


- Revised Governance Model under development- Ongoing consensus building work across Fairtrade


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RISK

CATEGORY

LEVEL OF

IMPACT LIKELIHOOD IMPACT2. Consensus is not reached on revenue distribution within Fairtrade Governance

/ FinancialStrategicobjective 1

L H


- - Significant achievements during Strategic Review process- Unanimous agreement that more efficient and cost

effective financial model is required


- Revised financial model under development


RISKCATEGORY


3. FLO-CERT does not have capacity to certify substantially increased numbers ofproducers/traders

Financial/People

Strategicobjective 2

M H


- - Consistent growth in FLO-CERT capacities


- Focus on aligning FLO-CERTs planning with Fairtrades ambition

-Consider alternative certification options

- Focus on achieving sufficient investment in FLO-CERT


RISKCATEGORY


4. Fairtrade can not develop the partnerships needed to deepen its impact, e.g. in conflict-affected regions

Strategic Strategicobjective 3

L H


- - Existing partnerships can act as building blocks


- Focus on developing approach to strategic and operational partnerships- Strengthening links with key actors- Stepping up impact assessment - proving Fairtrades development potential- Policy work outlining how Fairtrade can contribute to development in non-traditional areas like climate change and conflict-affected regions

Documents

Annex 3: Risk Management Framework Risk Category