Climate change and environmental issues are already considered to be critical factors in the day-to-day operations of businesses and in their sustainability.
International organizations and states are increasingly recognizing the need to establish guidelines and legislative frameworks to address the impacts of environmental issues and the consequences of climate change.
Inevitably businesses will have to seriously address all related issues either because they will be required to adapt to legislation or because they will face long-term sustainability challenges.
What are the risks for businesses
Environment and Sustainability
It concerns the identification of risks arising from production processes including the processing and handling of raw materials throughout the business locations and departments and across the value/supply chain which may potentially have an environmental footprint.
To calculate the risk one must take into consideration the methods used to manage the risk and the protection measures that have been taken.
The above relate directly to compliance with the legislative framework regarding the environment and the rules that have been set or will be adopted in the future.
Risk analysis and assessment is a continuous process that continuously takes into account the changing conditions and the effectiveness of the measures taken, thus leading to the sustainability of the business.
Climate Change and Sustainability
It involves the identification of risks arising from either the direct or indirect impacts of climate change, also known as physical and transitional risks respectively.
The analysis includes the identification of risks arising from extreme weather events (e.g. heat waves, floods, storms, heavy rainfall) or changes in the natural environment (e.g. sea level rise, drought, fires) which lead to changes in the conditions under which a company must operate.
It also includes the identification of risks related to changes in regulatory/policy frameworks and in socio-economic conditions due to climate change (e.g. changes in legislation, changes in consumer behavior, available technologies, transition to zero footprint economies etc.), which may create instability in the way businesses operate. However, this task includes also the identification of opportunities and incentives from the transition to the Green Economy.
In this case, risk management methods are considered in conjunction with any protective measures taken to reduce/mitigate the risk.
The knowledge of these risks contributes to the development of a strategy for their management, aiming at adaptation and long-term sustainability of the business at the lowest possible cost.
How do we contribute to the assessment of risks and their management
We support you with RiskClima a business risk identification and management software solution that leads to reliable results in terms of protecting your business against environmental and climate change risks.
RiskClima as a software solution has a functionality that targets areas where a review of procedures and additional protection measures may be required.
RiskClima can be part of a broader risk management process that your business needs to implement and execute.