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A risk taxonomy is a comprehensive, common and stable set of risk categories that is used within an organization.

By providing a comprehensive set of risk categories, it encourages those involved in risk identification to consider all types of risks that could affect the organization's objectives.
By providing a common set of risk categories, it facilitates the aggregation of risks from across the organization.
By providing a stable set of risk categories, it facilitates comparative analysis of an organization's risks over time.
This document includes considerations for departments and agencies with respect to developing and using a risk taxonomy. It outlines an approach to categorizing and aggregating risks that may be tailored to the specific needs of an organization.

It should be noted that a risk taxonomy is not a mandatory component of an integrated risk management approach. However, using a risk taxonomy can help to strengthen and better integrate an organization's risk management approach, given the benefits outlined above.

1.1 Developing a Risk Taxonomy

Developing a risk taxonomy requires establishing a set of risk categories. The categories should be sufficiently generic that they can be used to aggregate risks from various parts of the organization.

Examples of potential risk categories are found in section 2. Departments and agencies may tailor this list to their needs. For example, an organization may want to tailor the categories to better reflect its mandate, align with existing structures or classifications, or introduce sub-categories for risks that are particularly relevant to the organization's mandate. An organization should aim for a reasonable number of categories; not so many that the ability to aggregate becomes impeded, but not so few that the aggregation becomes meaningless and the discrete nature of the categories becomes eroded.

It

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