Above Ground Risk

DEFINITION of 'Above Ground Risk'

Non-quantifiable risks that can adversely affect a project or investment. Above ground risk is generally used in the energy industry to refer to non-technical risks such as environmental issues and the regulatory climate. More broadly, above ground risk refers to a wide range of somewhat nebulous risks such as political risk, corporate risk, security and corporate governance whose impact is difficult to quantify, but could be significant should one or more of these risks become a real threat.

BREAKING DOWN 'Above Ground Risk'

Above grounds risks may also include a number of risks that are less acknowledged such as corruption, bribery and conflicts of interest. The degree of above ground risk differs from one nation to the next. Countries with pro-business policies, strong governance and efficient legal systems may have a lower degree of above ground risk than those nations that do not possess these attributes.

RELATED TERMS
  1. Country Risk

    A collection of risks associated with investing in a foreign ...
  2. Risk Control

    The method by which firms evaluate potential losses and take ...
  3. Risk Profile

    An evaluation of an individual or organization's willingness ...
  4. Risk Asset

    Any asset that carries a degree of risk. Risk asset generally ...
  5. Specific Risk

    Risk that affects a very small number of assets. Specific risk, ...
  6. Accepting Risk

    A risk management method used in the business or investment field. ...
Related Articles
  1. Professionals

    Risk Management Framework (RMF): An Overview

    A company must identify the type of risks it is taking, as well as measure, report on, and set systems in place to manage and limit, those risks.
  2. Retirement

    Risk and Diversification: Different Types of Risk

    Let's take a look at the two basic types of risk: Systematic Risk - Systematic risk influences a large number of assets. A significant political event, for example, could affect several of the ...
  3. Professionals

    Types of Investment Risks

    FINRA Series 6: Section 9 Types of Investment Risks. This section explains different types of risks, exchange rate risk, Interest Rate Risk, Business Risk, Credit Risk, Taxability Risk, call ...
  4. Professionals

    The Risk Premium

    CFA Level 1 - The Risk Premium. This topic covers risk premium, which is a component of required rate of return. Examines business, financial, liquidity and political risk.
  5. Economics

    How to Invest In Developing Markets

    Developing markets can be attractive additions to many investor's portfolios, but carry additional risks that must be considered.
  6. Investing

    Impact Investing Funds: What are the Risks?

    Impact investing funds can carry risks unique to this asset class, including political risk, currency risk and exit risk.
  7. Professionals

    Risk And Returns

    We define the different types of risk and see how they influence investment returns.
  8. Entrepreneurship

    Why Companies Need Risk Management

    Implementing risk management strategies can save an entire organization from failure. Is yours up to snuff?
  9. Professionals

    Types of Risk

    CFA Level 1 - Types of Risk. Learn the three types of risk associated with capital budgeting. Covers stand-alone, corporate and market risk.
  10. Professionals

    Responding to Risks

    Responding to Risks
RELATED FAQS
  1. What is the difference between market risk and country risk?

    Learn about market risk and country risk, some examples of each and the main difference between these two types of risks. Read Answer >>
  2. What are the primary sources of market risk?

    Learn about market risk and the four primary sources of market risk including equity, interest rate, foreign exchange and ... Read Answer >>
  3. What is political risk and what can a multinational company do to minimize exposure?

    For multinational companies, political risk refers to the risk that a host country will make political decisions that will ... Read Answer >>
  4. What are the major categories of financial risk for a company?

    Examine four major categories of financial risk for a business that represent potential problems that a company may have ... Read Answer >>
  5. Why are mutual funds subject to market risk?

    Find out why mutual funds, like all investments, are subject to market risk, including how the different types of market ... Read Answer >>
  6. What are the key differences between financial risk and business risk to a company?

    Understand the difference between a company's financial risk and its business risk, along with some of the factors that affect ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center