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Climate Change Risk

Climate Change Risk


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.

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