Towards a Taxonomy of Systemic Risks

Systemic risks, emerging from dynamic interactions among natural, technological, and societal systems, pose multifaceted challenges to modern, interconnected societies. These risks emerge from the complex, interdependent relationships between various system elements and can lead to cascading effects across multiple domains. The complexity, non-linearity, and transboundary nature of these risks require a systems thinking approach for effective governance. This presentation introduces a taxonomy of systemic risks, categorizing elements, clarifying relationships, and fostering interdisciplinary dialogue to improve risk understanding and response strategies.

By systematically categorizing SR based on core elements, relationships, and characteristics, the taxonomy facilitates structured data collection and enables comparative analysis across diverse risk scenarios. It facilitates the identification of shared features and distinct differences among systemic risks, supporting more effective research and informed policymaking. Moreover, the taxonomy’s adaptive design ensures its continued relevance, allowing it to evolve as systemic risks change due to shifting societal, technological, and environmental dynamics. Thus, grounded in Forrester’s iterative system dynamics approach, the taxonomy evolves alongside systemic risk assessment, capturing new patterns and dynamics while remaining applicable across diverse contexts. This flexibility enables both granular analysis of specific risks and comparative studies across multiple domains.

An exemplary application of the taxonomy demonstrates its utility, while ongoing research critically evaluates its strengths and limitations. This work also explores the ethical implications of the taxonomy, critically assessing the normative assumptions underlying risk classification. This approach ensures that the taxonomy supports inclusive and equitable risk governance, recognizing diverse values and interests across stakeholders.

By identifying leverage points and key indicators, the taxonomy helps detect and mitigate systemic risks by efficiently pinpointing areas where interventions are most effective. It offers practical insights for developing resilience and improving decision-making by facilitating more targeted and efficient data collection. Hence, the taxonomy’s full potential will unfold as it is populated with data, enabling more effective interventions through a deeper understanding of systemic risks.

The proposed taxonomy is a significant contribution to SR research and governance, offering a structured framework and a first step towards a holistic assessment framework targeted at systemic risks. It holds the potential to improve responses to climate extremes and compound events, driving data-informed decision-making, and contributing to sustainable development, climate change resilience, and disaster risk reduction.