The management of climate change risk is transitioning. It is no longer just an environmental “green” issue, but one which is associated with both opportunities and constraints of growth. The sample of messages presented below, shows that an appreciation of the risk that climate change poses to economies and businesses, has rapidly extended beyond the dominion of commentators and those “on the periphery”, to one that is clearly gaining ground within the financial mainstream.
Key Points in this Report
• Disclosure exposes both good and bad practice: recent proceedings that augur more transparent and comparative disclosure frameworks will promote climate change risk to the near term.
• With risk comes opportunity: where managed appropriately a reduction in climate change risk can generate significant positive implications for an organisation’s reputation and brand proposition.
• Climate change adaptation, as a profession, is a speciality that differs from climate change mitigation: both climate change mitigation and adaptation fields are evolving. Whilst there is a very strong overlap, subtle differentiations do exist.
• An effective adaptation governance framework is key to reducing the risks and exploiting the opportunities that climate change presents.
• The nature of the messenger has changed: an appreciation of climate change risk to business and economies is rapidly shifting into the financial mainstream.
• Climate risk is multi-faceted: impacts extend well beyond direct physical degradation to create cascading implications at all societal levels.
• Climate change risk extends to the full value chain: physical risks in particular extend beyond direct operations to an organisation’s supply chain and markets.
• Transition risk is current: consumption and governance changes as society transitions from a fossil fuel economy represent immediate risks and opportunities for all businesses.
• Legal risk is an incentive to act: legal risk, implicit in actions and inactions to address climate change, travels behind the corporate veil to directors and boards.