Business Impact Assessment

A product assessment should include (in Phase 3) an assessment of the SHE impacts on the business. A structured business impact assessment provides information on the product’s positive and negative effects, and will highlight areas that need improvement.

The business impact assessment uses available data and the output of hazard assessments, and can identify where further detailed and technical risk assessment might be warranted. It is not a technical risk assessment in itself. It combines the conclusions of technical risk assessments with the risk perception and value-judgments of users, customers and society, in order to assess the overall implications for the business. The output is primarily a prioritized risk and opportunity list which can be addressed by the business plan.

The impact assessment is best suited as a team activity involving various disciplines in the company. The following steps can serve as guidance:

Step 1: Describe the product range

Identify the product under consideration:

  • specification - chemical, physical and packaging
  • market - region or countries, industry or public
  • use - broad area of use or application

Similarly, identify competing products in the market (own produced, third party products, and competitors' products). Identify the importance to the business of each product by considering volume and profit contribution.

Step 2: Identify threats and opportunities

Identify risk events that can occur at each stage of the product lifecycle, both at company’s locations and at contractors’ and customers’ locations. Consider, for example, how the product is stored, handled and used, including the number of people involved and their competence. Identify events that have a significant potential for causing harm to people, property or environment, and to commercial and financial business operations, and to the public image of the company.

Carry out a comparison with the impact of competitors' products and operations, and also consider the expectations of customers and society.

Identify any positive SHE attributes of the product.

Step 3: Estimate consequences

Rate each event identified in Step 2 according to the magnitude of its impact, such as:


Loss of business; loss of major part for several years


Major business image concern; significant sales loss; authority prosecution


Significant business cost; threat to business growth; loss of customer, poor image


Modest business cost; operational concern; action that is not good practice


Enhanced business direction; improved business image

Step 4: Establish potential causes and consider likelihood of event

Decide how likely it is that each event which could lead to harm or opportunity will arise. Also, consider how likely it is that, should the event happen, harm or opportunity will actually occur. It may be difficult to quantify these probabilities - evaluating them as high, medium or low may be sufficient.

Step 5: Establish business risks and agree suitable action plans

By subjectively combining the severity of different events established in Step 3, with their likelihood of occurrence as determined in Step 4, rate the various business risks and establish a priority list of improvement actions. Also identify potential commercial opportunities which could arise from foreseeable SHE scenarios relevant for the product.

Step 6: Review

The assessment will need to be reviewed following changes to product specifications, market or use.