Changing Profile of Corporate Climate Change Risk – Summary – Part 1

Mark Trexler and Laura Kosloff have issued a short book (on a website called DoShorts) entitled “The Changing Profile of Corporate Climate Change Risk” which discusses many of the topics that i want to explore on this website.

They portray very nicely the dynamic between how climate risk was understood as primarily a policy risk in the recent past and how this risk is shifting to more of a real business risk which could impact the functioning of the business including the supply chain.  As greenhouse gas emissions continue to increase and policies are not being successfully implemented the risks of climate change impacts increase and the policy risks become somewhat muted.

They summarize climate change as translating into business risks in the following ways;

“- Physical risk, including direct impacts of climate change on a company’s operations, supply chains, and financial performance;

– Brand risk, including the impact of consumer and stakeholder perceptions on corporate competitiveness;

– Policy risk, including the impacts of climate change policy and regulatory mandates on a company’s operations, supply chains,and competitive advantage;

– Structural risk, including the impacts of climate change-influenced market forces on the supply of and demand for a company’s products and services; and

– Liability risk, including litigation or legislation that could assign corporate liability for GHG emissions, potentially retroactively.”.

This provides a good framework to proceed and analyse some businesses and develop scenarios where the risks of climate change can be explored. These scenarios particularly when looking at local impacts need to explore both positive and negative impacts of climate change and these impacts on particular business and business models.

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