What type of risk does the term 'long-term risk' typically refer to?

The term 'long-term risk' typically refers to potential future losses arising from ongoing activities. This encompasses risks that may not be immediately realized but can accumulate over time, impacting an organization's overall strategic objectives or financial stability. Examples of long-term risks include those associated with regulatory changes, shifts in market dynamics, and sustainability issues, which may take time to manifest but can have significant consequences in the future.

This understanding distinguishes long-term risks from immediate financial loss, which is generally concerned with short-term impacts and does not account for the broader and more gradual changes that can affect an organization. Similarly, the concept of long-term risk is not related to short-duration projects since these often focus on immediate outcomes rather than the protracted implications of ongoing activities. Additionally, while reputational risks can certainly be long-term in nature, they do not encompass the complete range of risks classified as 'long-term.' Long-term risk captures a wider array of potential future losses than reputational risks alone.