climate change risk
A risk facing business and governmental entities resulting from climate change
and affecting natural and human systems. A common approach in dealing with this
loss exposure focuses on reducing the vulnerability associated with climate
risk by incorporating climate-sensitive decision-making in the risk management
process. The risk manager takes climate-related decisions or actions that make
sense in overall business strategy terms, whether or not a specific climate
threat actually materializes in the future. Three examples include greenhouse
gas (GHG) emission reduction efforts, energy conservation, and the adoption
of green building measures and approaches. Climate change risks include physical
risks, litigation risks, reputational risks, stockholder risks, regulatory risks,
and competition risks.
See also: Reputational
risk; Regulatory risk.