This is part of the DR plan that accounts for the customer’s target for the max period of time that data can be lost. This max time is used by the supplier/partner to determine the frequency of back ups required.
For example if the RPO is 6hrs for an organization. Then doing daily backups to ship offsite would be ineffective. Since in practice, following a major incident my recovery data could be a day old. This is also an important factor because the shorter the RPO the more expensive the plan will be to maintain.