5.1 Due Diligence Assessment of New Energy Options
A due diligence review is an instr u ment to measure risk.It is usually perf or med as part of a decision on an invest ment in pr ojects and can cover a broad range of risks.It is reco mmended that due diligence assess ments be carried out on sustainability aspects of new energy options prior to invest ment decisions.
Risk analysis requires risk to be deter mined fromthe co mbination of its components,likelihood and consequence.Tables below give exa mples of scales of likelihood and consequence.The relationship bet ween the t wo components will be a f unction of the context of the risk and may depend on many factors.It can be illustrated by means of a matrix such as given in the thir d of the three tables(Level of Risk).Where risk ratings are mediu m or high,measures are required to ensure reduction or effective management of risk.
Likelihood
Consequence or Impact(https://www.daowen.com)
Level of Risk
Modified after Standar ds Australia Risk Management Guidelines-Companion to AS/NZS 4360:2004