Fusing strategic risk and futures methods to inform long-term strategic planning: case of water utilities

Risks and futures methods have complementary strengths as tools for managing strategic decisions under uncertainty. When combined, these tools increase organisational competency to evaluate and manage long-term risks, improving the flexibility and agility of the organisation to deal with gross uncertainties. Here, we set out a framework to guide the assessment of strategic risks for long-term business planning, based on its application at Portugal’s largest water utility, Empresa Portuguesa das Águas Livres. Our approach extends strategic risk assessment by incorporating scenario planning—a futures approach used to help the utility move beyond single point forecast of risks to focus on critical dimensions of uncertainty that are fundamental to the resilience of corporate objectives and their vulnerability to external pressures. We demonstrate how we combine two complementary approaches—risk and futures—and use them to assess (i) how a set of baseline strategic risks for a water utility evolves under alternative futures, (ii) the aggregate corporate-level risk exposure, and (iii) the process and responses needed to manage multiple, interdependent strategic risks. The framework offers a corporate approach to evolving strategic risks and improves a utility’s (i) knowledge of uncertainties, (ii) ability to assess the impacts of external developments over long time horizons and the consequences of actions and (iii) degree of flexibility to adapt to possible future challenges. The framework supports risk managers in their long-term strategic planning, through the appraisal and management of multiple, interdependent long-term strategic risks and can be replicated in other organisational contexts to bridge operational and corporate perspectives of enterprise risk.

     

Uncertainty characterization approaches for risk assessment of DBPs in drinking water: A review

The management of risk from disinfection by-products (DBPs) in drinking water has become a critical issue over the last three decades. The areas of concern for risk management studies include (i) human health risk from DBPs, (ii) disinfection performance, (iii) technical feasibility (maintenance, management and operation) of treatment and disinfection approaches, and (iv) cost. Human health risk assessment is typically considered to be the most important phase of the risk-based decision-making or risk management studies. The factors associated with health risk assessment and other attributes are generally prone to considerable uncertainty. Probabilistic and non-probabilistic approaches have both been employed to characterize uncertainties associated with risk assessment. The probabilistic approaches include sampling-based methods (typically Monte Carlo simulation and stratified sampling) and asymptotic (approximate) reliability analysis (first- and second-order reliability methods). Non-probabilistic approaches include interval analysis, fuzzy set theory and possibility theory. However, it is generally accepted that no single method is suitable for the entire spectrum of problems encountered in uncertainty analyses for risk assessment. Each method has its own set of advantages and limitations. In this paper, the feasibility and limitations of different uncertainty analysis approaches are outlined for risk management studies of drinking water supply systems. The findings assist in the selection of suitable approaches for uncertainty analysis in risk management studies associated with DBPs and human health risk.     

Spatial variations of human health risk associated with exposure to chlorination by-products occurring in drinking water

During disinfection, chlorine reacts with organic matter present in drinking water and forms various undesirable chlorinated by-products (CBPs). This paper describes a study of the spatial variability of human health risk (i.e., cancer effects) from CBP exposure through drinking water in a specific region. The region under study involves nine drinking water distribution systems divided into several zones based on their characteristics. The spatial distribution of cancer risk (CR) was estimated using two years of data (2006-2008) on various CBP species. In this analysis, trihalomethanes (THMs) and haloacetic acids (HAAs) served as surrogates for CBPs. Three possible routes of exposure (i.e., via ingestion, inhalation and dermal contact) were considered for each selected compound. The cancer risk assessment involved estimating a unit risk (R(T)) in each zone of the selected distribution systems. A probabilistic analysis based on Monte Carlo simulations was employed. Risk assessment results showed that cancer risk varied between systems, but also within individual systems. As a result, the population of the same region was not exposed to the same risk associated with CBPs in drinking water. Unacceptable levels (i.e., R(T) > 10(-4)) for the estimated CR were determined for several zones in the studied region. This study demonstrates that a spatial-based analysis performed to represent the spatial distribution of risk estimates can be helpful in identifying suitable risk management strategies. Suggestions for improving the risk analysis procedure are also presented.     

Development of a risk-based index for source water protection planning, which supports the reduction of pathogens from agricultural activity entering water resources

Source water protection planning (SWPP) is an approach to prevent contamination of ground and surface water in watersheds where these resources may be abstracted for drinking or used for recreation. For SWPP the hazards within a watershed that could contribute to water contamination are identified together with the pathways that link them to the water resource. In rural areas, farms are significant potential sources of pathogens. A risk-based index can be used to support the assessment of the potential for contamination following guidelines on safety and operational efficacy of processes and practices developed as beneficial approaches to agricultural land management. Evaluation of the health risk for a target population requires knowledge of the strength of the hazard with respect to the pathogen load (massxconcentration). Manure handling and on-site wastewater treatment systems form the most important hazards, and both can comprise confined and unconfined source elements. There is also a need to understand the modification of pathogen numbers (attenuation) together with characteristics of the established pathways (surface or subsurface), which allow the movement of the contaminant species from a source to a receptor (water source). Many practices for manure management have not been fully evaluated for their impact on pathogen survival and transport in the environment. A key component is the identification of potential pathways of contaminant transport. This requires the development of a suitable digital elevation model of the watershed for surface movement and information on local groundwater aquifer systems for subsurface flows. Both require detailed soils and geological information. The pathways to surface and groundwater resources can then be identified. Details of land management, farm management practices (including animal and manure management) and agronomic practices have to be obtained, possibly from questionnaires completed by each producer within the watershed. To confirm that potential pathways are active requires some microbial source tracking. One possibility is to identify the molecular types of Escherichia coli present in each hazard on a farm. An essential part of any such index is the identification of mitigation strategies and practices that can reduce the magnitude of the hazard or block open pathways.     

Adaptive management for mitigating Cryptosporidium risk in source water: A case study in an agricultural catchment in South Australia

Water-borne pathogens such as Cryptosporidium pose a significant human health risk and catchments provide the first critical pollution ‘barrier’ in mitigating risk in drinking water supply. In this paper we apply an adaptive management framework to mitigating Cryptosporidium risk in source water using a case study of the Myponga catchment in South Australia. Firstly, we evaluated the effectiveness of past water quality management programs in relation to the adoption of practices by landholders using a socio-economic survey of land use and management in the catchment. The impact of past management on the mitigation of Cryptosporidium risk in source water was also evaluated based on analysis of water quality monitoring data. Quantitative risk assessment was used in planning the next round of management in the adaptive cycle. Specifically, a pathogen budget model was used to identify the major remaining sources of Cryptosporidium in the catchment and estimate the mitigation impact of 30 alternative catchment management scenarios. Survey results show that earlier programs have resulted in the comprehensive adoption of best management practices by dairy farmers including exclusion of stock from watercourses and effluent management from 2000 to 2007. Whilst median Cryptosporidium concentrations in source water have decreased since 2004 they remain above target levels and put pressure on other barriers to mitigate risk, particularly the treatment plant. Non-dairy calves were identified as the major remaining source of Cryptosporidium in the Myponga catchment. The restriction of watercourse access of non-dairy calves could achieve a further reduction in Cryptosporidium export to the Myponga reservoir of around 90% from current levels. The adaptive management framework applied in this study was useful in guiding learning from past management, and in analysing, planning and refocussing the next round of catchment management strategies to achieve water quality targets.     

A method for assessing environmental risk: A case study of Green Bay,Lake Michigan,USA

The Science Advisory Board of the US Environmental Protection Agency has recommended that risk reduction strategies become the centerpiece of environmental protection. The goal in developing such strategies is to identify opportunities for greatest reduction of ecological risks. This is a perspective that is significantly more comprehensive than the traditional focus on human health risks arising from environmental degradation. The identification of ecological risks upon which environmental protection efforts should be focused requires an ecological risk assessment methodology that is based on anthropogenic stressors affecting an ecosystem and a set of impaired use criteria. A methodology based on this concept is developed and discussed in this article. The methodology requires that risk values be assigned to each ecosystem stressor-impaired use pair that reflect the degree to which the given stressor contributes to ecosystem risk as measured by the given impaired use criterion. Once these data are available, mathematical analyses based on concepts from fuzzy set theory are performed to obtain a ranking of ecosystem stressors. The methodology has been tested by applying it to a case study involving Green Bay of Lake Michigan. A workshop was held in which 11 persons with extensive knowledge of the Green Bay ecosystem determined risk values through a group-consensus process. The analytical portion of the methodology was then used to rank the ecosystem risks (stressors) from several perspectives, including prevention management and remediation management. The overall conclusion of the workshop participants was that the fuzzy set decision model is a useful and effective methodology for differentiating environmental risk.     

A conceptual model for assessing ecological risk to water quality function of bottomland hardwood forests

Ecological risk assessment provides a methodology for evaluating the threats to ecosystem function associated with environmental perturbations or stressors. This report documents the development of a conceptual model for assessing the ecological risk to the water quality function (WQF) of bottomland hardwood riparian ecosystems (BHRE) in the Tifton-Vidalia upland (TVU) ecoregion of Georgia. Previus research has demonstrated that mature BHRE are essential to maintaining water quality in this portion of the coastal plain. The WQF of these ecosystems is considered an assessment endpoit—an ecosystem function or set of functions that society chooses to value as evidenced by laws, regulations, or common usage. Stressors operate on ecosystems at risk through an exposure scenario to produce ecological effects that are linked to loss of the desired function or assessment end point. The WQF of BHRE is at risk because of the ecological and environmental quality effects of a suite of chemical, physical, and biological stressors. The stressors are related to nonpoint source pollution from adjacent land uses, especially agriculture; the conversion of BHRE to other land uses; and the encroachment of domestic animals into BHRE. Potential chemical, physical, and biological stressors to BHRE are identified, and the methodology for evaluating appropriate exposure scenarios is discussed. Field-scale and watershed-scale measurement end points of most use in assessing the effects of stressors on the WQF are identified and discussed. The product of this study is a conceptual model of how risks to the WQF of BHRE are produced and how the risk and associated uncertainties can be quantified.     

基于价值创造视角的公司水风险管理研究

随着全球水资源供应不确定性与需求竞争性的加剧,水资源问题已从单纯的环境问题转化为经济问题,水风险逐渐与商业风险挂钩,公司面临的水风险不断上升。公司面临着物理风险、监管风险和声誉风险等水风险,公司水价值体现在业务连续性、经营牌照、声誉与品牌价值和创新价值等无形资产中。水风险与水价值二者相互联系又相互影响,通过公司水价值与水风险评估框架,了解区分水价值的不同方法,明确风险和不确定性如何影响水的价值,并利用水工具评估和管理公司所面临的水风险以及水对公司价值的影响,帮助公司化解其所面临的水风险,实现从公司水风险管理到价值创造的转变。     

Relative cancer risks of chemical contaminants in the great lakes

Anyone who drinks water or eats fish from the Great Lakes consumes potentially carcinogenic chemicals. In choosing how to respond to such pollution, it is important to put the risks these contaminants pose in perspective. Based on recent measurements of carcinogens in Great Lakes fish and water, calculations of lifetime risks of cancer indicate that consumers of sport fish face cancer risks from Great Lakes contaminants that are several orders of magnitude higher than the risks posed by drinking Great Lakes water. But drinking urban groundwater and breathing urban air may be as hazardous as frequent consumption of sport fish from the Great Lakes. Making such comparisons is difficult because of variation in types and quality of information available and in the methods for estimating risk. Much uncertainty pervades the risk assessment process in such areas as estimating carcinogenic potency and human exposure to contaminants. If risk assessment is to be made more useful, it is important to quantify this uncertainty.     

Contextualising risk within enterprise risk management through the application of systems thinking

New and emerging risks create growing uncertainty and unpredictability within enterprise risk management. While ISO 31000:2009 is a progressive risk management framework, it is limited in its guidance on how to contextualise complex risks. The application of systems thinking to risk management provides the opportunity to better understand complexity by viewing risk and the consequence of change as part of overall system behaviour. System modelling tools enable organisations to better contextualise their risk landscape. These tools assist organisations to identify vulnerabilities between social and ecological variables in the system within they exist. Determining drivers of change leading to system vulnerabilities can assist in understanding threshold limits of the system, thus enabling the organisation to build system resilience and organisational sustainability.     

Uncertainty modelling in multi-criteria analysis of water safety measures

Water utilities must assess risks and make decisions on safety measures in order to obtain a safe and sustainable drinking water supply. The World Health Organization emphasises preparation of water safety plans, in which risk ranking by means of risk matrices with discretised probability and consequence scales is commonly used. Risk ranking enables prioritisation of risks, but there is currently no common and structured way of performing uncertainty analysis and using risk ranking for evaluating and comparing water safety measures. To enable a proper prioritisation of safety measures and an efficient use of available resources for risk reduction, two alternative models linking risk ranking and multi-criteria decision analysis (MCDA) are presented and evaluated. The two models specifically enable uncertainty modelling in MCDA, and they differ in terms of how uncertainties in risk levels are considered. The need of formal handling of risk and uncertainty in MCDA is emphasised in the literature, and the suggested models provide innovations that are not dependent on the application domain. In the case study application presented here, possible safety measures are evaluated based on the benefit of estimated risk reduction, the cost of implementation and the probability of not achieving an acceptable risk level. Additional criteria such as environmental impact and consumer trust may also be included when applying the models. The case study shows how safety measures can be ranked based on preference scores or cost-effectiveness and how measures not reducing the risk enough can be identified and disqualified. Furthermore, the probability of each safety measure being ranked highest can be calculated. The two models provide a stepwise procedure for prioritising safety measures and enable a formalised handling of uncertainties in input data and results.     

Risk assessment of aquifer storage transfer and recovery with urban stormwater for producing water of a potable quality

The objective of the Parafield Aquifer Storage Transfer and Recovery research project in South Australia is to determine whether stormwater from an urban catchment that is treated in a constructed wetland and stored in an initially brackish aquifer before recovery can meet potable water standards. The water produced by the stormwater harvesting system, which included a constructed wetland, was found to be near potable quality. Parameters exceeding the drinking water guidelines before recharge included small numbers of fecal indicator bacteria and elevated iron concentrations and associated color. This is the first reported study of a managed aquifer recharge (MAR) scheme to be assessed following the Australian guidelines for MAR. A comprehensive staged approach to assess the risks to human health and the environment of this project has been undertaken, with 12 hazards being assessed. A quantitative microbial risk assessment undertaken on the water recovered from the aquifer indicated that the residual risks posed by the pathogenic hazards were acceptable if further supplementary treatment was included. Residual risks from organic chemicals were also assessed to be low based on an intensive monitoring program. Elevated iron concentrations in the recovered water exceeded the potable water guidelines. Iron concentrations increased after underground storage but would be acceptable after postrecovery aeration treatment. Arsenic concentrations in the recovered water continuously met the guideline concentrations acceptable for potable water supplies. However, the elevated concentration of arsenic in native groundwater and its presence in aquifer minerals suggest that the continuing acceptable residual risk from arsenic requires further evaluation.     

The real water consumption behind drinking water: the case of Italy

The real amount of drinking water available per capita is a topic of great interest for human health and the economic and political management of resources. The global market of bottled drinking water, for instance, has shown exponential growth in the last twenty years, mainly due to reductions in production costs and investment in promotion. This paper aims to evaluate how much freshwater is actually consumed when water is drunk in Italy, which can be considered a mature bottled-water market. A Water Footprint (WF) calculation was used to compare the alternatives: bottled and tap water. Six Italian brands of water sold in PET bottles were inventoried, analysed and compared with the public tap water of the city of Siena, as representative of the Italian context. Results showed that more than 3 L of water were needed to provide consumers with 1.50 L of drinking water. In particular, a volume of 1.50 L of PET-bottled water required an extra virtual volume of 1.93 L of water while an extra 2.13 L was necessary to supply the same volume of tap water. These values had very different composition and origin. The WF of tap water was mainly due to losses of water during pipeline distribution and usage, while WF of bottled water was greatly influenced by the production of plastic materials. When the contribution of cooling water was added to the calculation, the WF of bottled water rose from 3.43 to 6.92 L. Different strategies to reduce total water footprint are discussed.     

Five-wheel framework for system-based monitoring of heavy metal pollution in rivers

Sectorial approach for monitoring heavy metal pollution in rivers has failed to report realistic pollution status and associated ecological and human health risks. The increasing spread of heavy metals from different sources and emerging risks to human and environmental health call for reexamining heavy metal pollution monitoring frameworks. Also, the sources, spread, and load of heavy metals in the environment have changed significantly over time, requiring consequent modification in the monitoring frameworks. Therefore, studies on heavy metal monitoring in rivers conducted in the last decade were evaluated for experimental designs, research frameworks, and data presentations. Most studies (∼99%) (i) lacked inclusiveness of all environmental compartments; (ii) focused on “one pollutant – one/two compartment” or sometimes “one pollutant – one compartment – one effect” approach; and (iii) remained “data-rich but information poor.” An ecological approach with integrative system thinking is proposed to develop a holistic approach for monitoring river pollution. It is visualized that heavy metal monitoring, risk analyses, and water management must incorporate tracking pollutants in different environmental compartments of a river (water, sediment, and floodplain/bank soil) and consider correlating it with riverbank land use. The systems-based pollution monitoring and assessment studies will reveal the critical factors that drive heavy metals pollutant movement in ecosystems and associated potential risks to the environment, wildlife, and humans. Also, water quality and pollution indexing tools would help better communicate complex pollution data and associated risks among all stakeholders. Therefore, integrating systems approaches in scientific- and policy-based tools would help sustainably manage the health of rivers, wildlife, and humans.     

Dynamic real-time risk analytics of uncontrollable states in complex internet of things systems: cyber risk at the edge

The Internet of Things (IoT) triggers new types of cyber risks. Therefore, the integration of new IoT devices and services requires a self-assessment of IoT cyber security posture. By security posture this article refers to the cybersecurity strength of an organisation to predict, prevent and respond to cyberthreats. At present, there is a gap in the state of the art, because there are no self-assessment methods for quantifying IoT cyber risk posture. To address this gap, an empirical analysis is performed of 12 cyber risk assessment approaches. The results and the main findings from the analysis is presented as the current and a target risk state for IoT systems, followed by conclusions and recommendations on a transformation roadmap, describing how IoT systems can achieve the target state with a new goal-oriented dependency model. By target state, we refer to the cyber security target that matches the generic security requirements of an organisation. The research paper studies and adapts four alternatives for IoT risk assessment and identifies the goal-oriented dependency modelling as a dominant approach among the risk assessment models studied. The new goal-oriented dependency model in this article enables the assessment of uncontrollable risk states in complex IoT systems and can be used for a quantitative self-assessment of IoT cyber risk posture.

     

The Peconic River: Concerns associated with different risk evaluations for fish consumption

Risk evaluation and assessment have been used as tools to regulate and manage the risks to consumers of eating self-caught fish that have high levels of contaminants. Armed with these risk assessments, health agencies issue consumption advisories, and in some cases, close some waters to fishing. Recently, regulatory agencies have used contaminant levels in fish as a benchmark for remedial action on contaminated sites, using human health risk assessment as the justification. The US Environmental Protection Agency's new surface water criterion for mercury is based on mercury levels in fish tissue. When multiple regulatory agencies have jurisdiction over the same waters or remediation site there is the potential for differing risk evaluations. Using the Peconic River on Long Island, New York as a case study, the paper examines how and why county, state, and federal health risk evaluations for fish contaminated with mercury differed. While the same risk methodology was applied by all agencies, the assessments were conducted for different purposes, applied different consumption and fish biomass assumptions, and arrived at different conclusions. The risk evaluations invoked to design fish consumption advisories use mercury levels currently in fish, and are designed to prevent current exposure. However, the risk assessments that provide a basis for remediation consider many different pathways of exposure (not just ingestion), and deal with long-term exposure. The risk evaluations, and recommendations promulgated by those agencies, differ because they have different goals, use different assumptions, and often fail to communicate among agencies. It is suggested that it is valuable to have these different levels of risk evaluations to adequately address health issues. However, there are policy implications, which include making the distinctions between the types of risk assessments, their methods and assumptions, and the rationale for these assumptions. Further, assessors and managers should involve all interested stakeholders (including regulators and state health officials) in discussions about the use of risk, the assumptions of risk assessment, and the goals of those evaluations. The difficulties in the case of the Peconic were not due to differences in the original data, but rather in the goals and type of risk assessments performed. If all deliberations had been transparent during all phases of the decision-making and management process, the conflicts within the minds of the public, regulators and other agencies might have been avoided. This case study suggests that more reliability, circumspection and transparency should be built into the process where multiple agencies and multiple objectives are involved.     

Integrated Risk Framework for Onsite Wastewater Treatment Systems

Onsite wastewater treatment systems (OWTS) are becoming increasingly important for the treatment and dispersal of effluent in new urbanised developments that are not serviced by centralised wastewater collection and treatment systems. However, the current standards and guidelines adopted by many local authorities for assessing suitable site and soil conditions for OWTS are increasingly coming under scrutiny due to the public health and environmental impacts caused by poorly performing systems, in particular septic tank-soil adsorption systems. In order to achieve sustainable onsite wastewater treatment with minimal impacts on the environment and public health, more appropriate means of assessment are required. This paper highlights an integrated risk based approach for assessing the inherent hazards associated with OWTS in order to manage and mitigate the environmental and public health risks inherent with onsite wastewater treatment. In developing a sound and cohesive integrated risk framework for OWTS, several key issues must be recognised. These include the inclusion of relevant stakeholders throughout framework development, the integration of scientific knowledge, data and analysis with risk assessment and management ideals, and identification of the appropriate performance goals for successful management and mitigation of associated risks. These issues were addressed in the development of the risk framework to provide a generic approach to assessing risk from OWTS. The utilisation of the developed risk framework for achieving more appropriate assessment and management techniques for OWTS is presented in a case study for the Gold Coast region, Queensland State, Australia.     

Towards an Integrated Approach to Natural Hazards Risk Assessment Using GIS: With Reference to Bushfires

This paper develops a GIS-based integrated approach to risk assessment in natural hazards, with reference to bushfires. The challenges for undertaking this approach have three components: data integration, risk assessment tasks, and risk decision-making. First, data integration in GIS is a fundamental step for subsequent risk assessment tasks and risk decision-making. A series of spatial data integration issues within GIS such as geographical scales and data models are addressed. Particularly, the integration of both physical environmental data and socioeconomic data is examined with an example linking remotely sensed data and areal census data in GIS. Second, specific risk assessment tasks, such as hazard behavior simulation and vulnerability assessment, should be undertaken in order to understand complex hazard risks and provide support for risk decision-making. For risk assessment tasks involving heterogeneous data sources, the selection of spatial analysis units is important. Third, risk decision-making concerns spatial preferences and/or patterns, and a multicriteria evaluation (MCE)-GIS typology for risk decision-making is presented that incorporates three perspectives: spatial data types, data models, and methods development. Both conventional MCE methods and artificial intelligence-based methods with GIS are identified to facilitate spatial risk decision-making in a rational and interpretable way. Finally, the paper concludes that the integrated approach can be used to assist risk management of natural hazards, in theory and in practice.     

Risk Management of Sediment Stress: A Framework for Sediment Risk Management Research

Research related to the ecological risk management of sediment stress in watersheds is placed under a common conceptual framework in order to help promote the timely advance of decision support methods for aquatic resource managers and watershed-level planning. The proposed risk management research program relies heavily on model development and verification, and should be applied under an adaptive management approach. The framework is centered on using best management practices (BMPs), including eco-restoration. It is designed to encourage the development of numerical representations of the performance of these management options, the integration of this information into sediment transport simulation models that account for uncertainty in both input and output, and would use strategic environmental monitoring to guide sediment-related risk management decisions for mixed land use watersheds. The goal of this project was to provide a sound scientific framework based on recent state of the practice in sediment-related risk assessment and management for research and regulatory activities. As a result, shortcomings in the extant data and measurement and modeling tools were identified that can help determine future research direction. The compilation of information is beneficial to the coordination of related work being conducted within and across entities responsible for managing watershed-scale risks to aquatic ecosystems.