Managing Climate Change Strategies For Corporate Risk Management

Abstract

With the increasing climate-related risks forcing more corporations to incorporate the aspect of climate to their risk management plans, there is a steady rise in the implementation of the climate aspect on the risk management frontier by corporations across the world. This paper explores the process of determining, reporting, and positioning of physical and transition climate-related risks by businesses belonging to diverse industries. With a thematic literature review and a case study analysis approach, the paper sets out to identify such important strategies of the corporations as scenario-based risk modeling, Enterprise Risk Management (ERM) inclusion, regulatory compliance (disclosure frameworks such as TCFD and CSRD), and financial initiatives, like green bonds. The findings show that; although regulatory forces are encouraging more transparent climate reporting, there are significant differences in the quality of implementation among firms and sectors. Additionally, the companies, which consider the issue of climate risk as not only a regulatory concern but also a strategic advantage, will be more likely to raise money, mitigating exposure, and trust of various stakeholders accordingly. The results indicate the need to integrate climate resilience into governance, finance and operation as part of long-term corporate sustainability.