Shifting Landscapes

The Global Sustainability and Climate Risk Resource Center

The Global Association of Risk Professionals

In 2018, extreme weather directly affected around 60 million people, causing a ripple effect of physical, transition and liability risk around the world.1

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Potential 2–6°C temperature rise by 21002

Risk managers need to lead the conversation – because there’s a huge amount at stake. From increasing exposure to heightened political tension, the climate risk ecosystem is challenging assumptions and changing global business.

A 2°C rise will cost the world economy 7.9 trillion USD by 20503

7,900,000,000,000 USD         

For example, it’s easy to see how the consumer goods sector will be affected by such emerging physical risks as persistent high temperatures and drought, with changes in weather patterns leading to poorer crop yields and significant supply chain disruptions.

But the truth is that every business will feel the effects of climate change

Key locations could become unusable because of flooding – also a major concern for mortgage and insurance underwriters. And infrastructure failures affecting power grids and transport links4 will be a source of concern for everyone from exporters to market traders.

Global sea levels are predicted to rise up to 60cm by 21005

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Though 80% of all businesses6 identify climate change risks, just half use scenario analysis to assess these risks, which many only perform on an ad hoc basis.

A different mentality is required. To map out climate change risks, we need to look to the future, not just at past data, to deal with uncertainty and take resolute action.

For airlines, carbon offsetting isn’t just a public relations tool but an essential contribution towards a viable and sustainable future.7

Many central banks8 around the world are already introducing climate-related stress testing.

More than 40 governments have set prices on carbon emissions9

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There are over 1,500 climate laws and policies worldwide10

1,200 of these were introduced after 1997 – a dramatic11 shift over two decades.

New organizations such as the Network for Greening the Financial System (NGFS) and the Task Force on Climate-Related Financial Disclosures are driving global policy and regulatory change.

Only 15% of firms believe their existing climate strategy is resilient enough to withstand further climate change12

Even as some large organizations pledge to be carbon-neutral before 205013, and several look to thresholds that would cover scope 3 emissions, the corporate world knows this is just the first step.

We need to bear in mind that there are many opportunities to grasp in this shifting landscape, as well as risks to manage.

Early investment and green business strategies, alongside early responses to transitional risks can all help businesses find success amongst the challenges of climate change.

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‘Bold action’ on climate change today could generate gains of 26 trillion USD and create 65 million new jobs by 203014

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Projected growth in sustainable mutual funds and ETFs of up to 1 trillion USD over the next decade15

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92% of business leaders believe emerging technology can boost sustainability and ROI16

We’re here to help you navigate climate change risks, improve awareness and support plans of action, as you and your business move towards a sustainable future.

Where next?

Our Sustainability and Climate Risk Certificate
We’ve designed our sustainability and climate risk certificate to help risk professionals prepare for change, then set and manage standards for years to come. FIND OUT MORE
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