Climate Change Risk Management Guidance
Chair, Institute of
Risk Management (IRM)
This is the first time the IRM has published a guidance report focused solely on climate change for risk managers. This marks an important formal recognition of the importance of Environmental, Social and Governance (ESG) issues to global business and the pivotal role that risk managers will have in helping to address the climate crisis.
Effective action for risk managers means understanding the implications of climate science for your business and acting to create a new status quo where acting, instead of waiting to see what happens, is the default position. This means getting to a place where sustainable forward-looking climate change risk mitigation measures are built into business plans now.
I’d like to formally thank the IRM’s Climate Change Special Interest Group: Chair, Martin Massey MIRM, Bogdan Pletea IRMCert, Darren Munday CFIRM, Iain Felstead, and Neil Cantle from Milliman (sponsors) for their contributions to this vital piece of work. I also look forward to the ongoing series of activity around this important topic in the lead up to COP26 and beyond, and the second report being published in 2022.
To join the Climate Change Special Interest Group and receive further updates please click here.
A word from our sponsor:
Neil Cantle MA FIA MIoD CERA
The effects of climate change are complex and uncertain. There are risks and for some there are opportunities. Having the ability to identify and manage these is crucial. For many years, pioneers in the climate change domain faced the challenge of having to invent the methods and tools they needed to identify and manage the risks associated with climate change.
With scarce data and limited modelling capabilities, they struggled to make headway. But they persevered, and slowly but surely, glimmers of good practice are emerging.
As public sentiment has swung behind the need to do more, regulators, such as the Bank of England, have also taken measures to encourage firms to step up, requiring them to embed climate change considerations into their risk and governance frameworks. For risk professionals the topic can feel rather daunting, as climate change touches the whole organisation and interacts with many existing initiatives and activities, such as Environmental, Social and Governance goals or sustainability targets. Over recent years, a number of industry and academic bodies have emerged with the aim of building on the early work done, to help risk managers and their firms adapt their organisations as the economy transitions to net-zero carbon emissions.
To contribute to that effort, the Institute of Risk Management’s Climate Change Special Interest Group came together with a desire to identify and share best practices, to specifically help risk professionals navigate the complexities of climate change impacts on their organisation. This practitioners’ guide is a first step in compiling a set of practices that risk professionals can use to identify, assess, manage, monitor and communicate the effects of climate change on their organisation.
Milliman is therefore pleased to support the production of this guide and would like to thank Martin Massey as Chair of the Special Interest Group and the members of the Group’s working party for their efforts in researching and contributing the content provided in this first report. In combination with a second report, to be issued subsequently, this guide should be an essential resource for risk management professionals looking to engage with climate change related risk.
Thanks to our sponsor Milliman
and media partner Commercial Risk