Tuesday, 18 May 2010

The risk of climate change is climbing the business agenda.

Ceres, a US coalition of investors, environmental groups and others working with companies to address sustainability challenges, has published a report on the perceived risks associated with climate change.  Called ‘Climate Change Risk Perception and Management: A Survey of Risk Managers’, the survey-based report was backed by Zurich Financial Services and the Professional Risk Managers’ International Association (PRMIA).

In all, 202 people responded, from a range of industries, including agriculture, heavy emitting industries such as power producers, manufacturing and mining, financial services, insurance and others.


The chart above shows the respondents’ views on the likely impact of five types of climate risk: regulatory, physical, competitive, legal, and reputational.  (‘Competitive risk’ is a bit of a misnomer – it’s more of a market risk).

Anyway, a majority thought that regulatory, physical, competitive and legal climate risks are likely – either ‘very’
or ‘somewhat’, with competitive/market risk the very clear leader.  Reputational risk was, surprisingly, the only area where less than half of respondents thought there was a potential risk.


The responses make the point that there is a significant perceived business risk from climate change.  In this study it’s the heavy emitting industries – power generation and heavy industry – that showed the most concern about likely impacts.  There was little or no mention of the retail industry in the analysis, a sector that might also have been more concerned about reputational and competitive risks.  It may be that public pressure is less of an issue in the US.  In any case, I would think that the risk assessment across the board would be higher in Europe.

Clearly, though, the risk from climate change is high on the business agenda.  All of the five aspects in the above chart have the potential to call on ICT to help minimise the risk, though greater process efficiencies, better information and analysis, faster response to climate issues, closer monitoring of environmental impacts, etc.  It’s certainly a topic that ICT companies should be discussing with their clients.

© The Green IT Review

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