IRM Special Interest Groups

This book was published on the 3rd of December 2022 and is intended for all who want a comprehensive introduction to current and new Enterprise Risk Management practices aimed at integrating climate change into the risk strategy of organisations Many of the Climate Change Group committee members provided their insights and support including specific case studies for the book so it was a great collaborative effort

The book builds on the work undertaken by the IRM which has, for example, identified key enablers that would require the most attention to facilitate the development and execution of a climate change risk management strategy

The book focuses on two foundational components of climate change risk management namely ‘resilience’, and ‘sustainability’ In respect to risk trends, the book includes two chapters specially focused on emerging risks – Chapter 8 “Designing an effective emerging climate risk management process " and Chapter 9 “Emerging climate trends, issues and challenges”

In 2022 global events that were not predicted included the invasion of Ukraine by Russia which has led to the biggest land war in Europe since 1945 This has led to a significant increase in energy and food costs that has fuelled the highest rates of inflation since the 1980s, which is creating major macroeconomic challenges for most countries

It can be argued that the main drivers of risks (or underlying root causes) have been geopolitical with the American-led post-war order being challenged and we are seeing the decoupling of the two biggest global economies of the USA and China

World Economic Forum (WEF) Global Risks Report 2023

However, despite the short term concerns around the cost of living, climate change continues to be perceived as the gravest long-term threat to humanity and in the latest Global Risk Report 2023 that was published in January the respondents’ rated “failure to mitigate climate change” and “failure of climate change adaptation” being the top two global risks likely to have a severe impact over a two year and ten year period"

The report goes on to state that “climate and environmental risks are the core focus of global risks perceptions over the next decade – and are the risks for which we are seen to be the least prepared. The lack of deep, concerted progress on climate targets has exposed the divergence between what is scientifically necessary to achieve net-zero and what is politically feasible ”

Environmental Sustainability and Energy Trade-Offs