Managing the impacts of climate change: risk management responses

It is widely acknowledged that the full impact of climate change is yet to be realized. While there has been a significant tangible impact, such as increases in average air and ocean temperatures around the globe, without immediate action there could be further catastrophic damage to the environment. However, there is also a consensus that adopting measures to avoid devastating climate change – such as those outlined in the Paris Agreement – will have a material impact on the economic and corporate landscape.

Zurich’s report, “Managing the Impacts of Climate Change: Risk Management Responses” outlines two distinct scenarios, positioned at opposite ends of the spectrum in terms of taking action on climate change.

One scenario is based on the failure to act on climate change, resulting in a steady rise in temperature and rising physical risk. The other scenario assumes that effective measures are taken to reduce carbon emissions, in line with keeping the rise in global temperature below 2 C relative to pre-industrial levels by 2100. This is consistent with the main aim of the COP 21 Paris Agreement, but carries a number of transition risks with it.

The challenge is to act now. This is the opportunity for the C-suite to take the lead, starting with driving behavior within their own organization, taking the audience through strategic steps they can take to create a culture of risk awareness and how they can build climate resilience into their business.

Zurich also focuses on how the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) can assist business in developing a robust and lasting climate resilience strategy.

This report provides the reader with key actionable strategies.