Assessing organisational climate change risk

Abstract

Strategy and risk are two sides of the same coin. Hindsight has proven that risk from a global pandemic was underestimated; Coronavirus forced organisations to re-evaluate their strategy. Furthermore, sophisticated assessments of risk are not only the trend, but they are also prudent and opportune. For organisations, the growing move to assess climate change risk is important from a mitigation perspective, but vitally, as an opportunity gauge as well. This paper will be a summary review of risk from an organisational climate change assessment perspective using traditional risk matrix traffic lights and risk dashboards, to more finetuned technologies. This paper will also examine changing, nascent trends in climate change risk assessment as well as opportunities that can be manifested by adapting now and responding with a longerterm view of strategy within a global economy. Currently many organisations are sentient to the rewards afforded to practitioners of sustainability. They are investigating and revising their risk management processes and risk appetite to form a culture more aligned to the imperatives that climate change action will require, given diverse stakeholder demands and expectations. This paper looks at leading organisations that are becoming more receptive and agile in a future that adapts alongside climate change. The conclusion recommends a strategy for climate change risk assessment and anticipates the world-leading disclosure requirements under The Financial Sector (Climate-related Disclosure and Other Matters) Amendment Bill.