Risk appetite is the high-level, strategic degree of uncertainty an organization is willing to accept in pursuit of its objectives and in anticipation of a reward. It sets the overall tone for risk-taking within the entity. This concept addresses the fundamental question of how much risk is acceptable to achieve strategic goals. The question's phrasing, "degree of uncertainty an entity is willing to take on," directly corresponds to the official definition of risk appetite.

1. Project Management Institute. (2021). A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Seventh Edition. Project Management Institute

Inc.

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Glossary: Defines Risk Appetite as "The degree of uncertainty an organization or individual is willing to accept in anticipation of a reward."

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Glossary: Defines Risk Tolerance as "The specified range of acceptable variation an organization is willing to accept for a project or project objective."

2. Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2017). Enterprise Risk Management—Integrating with Strategy and Performance.

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Executive Summary: Defines Risk Appetite as "The types and amount of risk

on a broad level

an organization is willing to accept in its pursuit of value." This foundational document in risk management reinforces the PMI definition.