According to an Airmic Big Question survey, the climate transition risk that most organizations measure is reputational risk. 77 percent of respondents said that their organization models and quantifies reputational risks relating to the climate transition.
Other climate transition risks identified in the survey as being key areas for modelling and quantifying were:
- Policy and legal risks (71 percent)
- Market risk (65 percent)
- Technology risk (53 percent)
- Others – including geopolitical risk (24 percent).
With the rise in cases of greenwashing reported around the world, reputational risk – as it relates to the climate transition – has emerged as a top concern for Airmic members. Given the velocity of social media today, corporate reputations can be torn to shreds in minutes. Risk professionals must be on top of the risks associated with the climate transition.
Leigh-Anne Slade, Head of Media, Communications and Interest Groups, Airmic
In collaboration with KPMG and the Lloyd’s Market Association (LMA), Airmic has embarked on a project examining how the insurance sector as a whole can better support organizations through the climate transition. Airmic seeks to bring risk professionals together to work through some of these issues facing them and their organizations, through platforms such as its Climate Special Interest Group.
Organizations including the World Economic Forum are warning of a disorderly climate transition. There is a risk of divergence on the direction of travel between governments, which are setting climate targets, and businesses. To preempt any barriers to much-needed cooperation, Airmic is doing its part to foster more dialogue between insurers, brokers, and insurance buyers and risk professionals, to ensure that climate initiatives have the right intended consequences.
Julia Graham, CEO, Airmic
