PRMIA Institute Releases Paper on Climate Risk


The new Governor of the Bank of England, Andrew Bailey, recently remarked that "we cannot diversify away from our exposure to the planet." And given that we also can’t diversify away from climate change, we either give up or start acting now. Different parts of the political, economic, and financial system are moving. There is a calm before the storm. Small changes can trigger a cascading effect, which can lead to dramatic exponential changes in a complex system.

In the PRMIA Institute’s newest paper, A Random Walk Into Climate Disaster, Gerhard Mulder explores how risk managers should be able to adapt in response to changes and new information. This "adaptive management" approach promotes continuous learning and flexible project design. An adaptive plan specifies actions to be taken immediately to be prepared for the near future and actions to be taken now to keep options open to adapt if needed in the future.

Climate risk is an evolving, transformative issue that will require changing the fundamental attributes of the organization and ultimately will redefine the core purpose of the organization. That change may start with the risk manager.

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