Transforming Climate Risk Management

20 November, 2023

By Swenja Surminski, Managing Director, Climate and Sustainability, Marsh McLennan

Transforming climate risk management is a critical imperative for achieving a sustainable future. As we can all see, climate-related risks are increasing at an alarming rate in many parts of the world. More frequent and severe events pose an increasing, complex threat to society, economic activity and the natural environment. These risk levels are amplified by climate change, nature loss and the continued concentration of people and assets in risk-prone areas.

Conventional strategies and incremental approaches are proving insufficient to address rapidly changing risk levels. The scale and complexity of this challenge requires a proper transformation of climate risk management. We need to deploy solutions in a forward-looking, cross-cutting and collaborative manner; tackle the underlying risk drivers; and frame climate risk management as an investment opportunity.

COP28 offers a unique opportunity for governments and the private sector to collaborate on shifting society from the current reactive to the much-needed proactive approach. Marsh McLennan is uniquely positioned to mobilize for change with its 85,000 colleagues advising business and government leaders in 130 countries. Our experts across four global businesses – Marsh, Guy Carpenter, Mercer and Oliver Wyman – are building climate resilience through innovative business solutions and ongoing initiatives. These include:

Realizing co-benefits can help build a stronger investment case. One example is nature-based solutions, such as mangroves, wetlands, coral reefs and urban greening. These offer advantages in the form of averted losses, economic benefits and social and environmental dividends. With the right tools, these can be integrated into financial decisions. Guy Carpenter has launched a wildfire mitigation framework to assess the efficacy of eco-friendly risk reduction strategies such as fire buffer zones and found that these could reduce wildfire losses and insurance costs. Building on this, we are now working with leading conservation groups and local water agencies to assess how to incorporate other nature-based risk reduction efforts into catastrophe modeling and pricing.

While at COP28, our team looks forward to supporting the work of the Resilience Hub and further advancing initiatives designed to bolster climate resilience. We plan to launch – in conjunction with the UN Climate Change High-Level Champions – a new report offering actionable steps for how insurers can make climate adaptation a true strategic imperative. We will unveil new product offerings that address climate risks and corporate supply chains, demonstrate how to harness the benefits of nature-based solutions and further the investment case for resilience through our work with asset managers and investors. Perhaps most importantly, we will be bringing a spirit of engagement and learning into our discussions with clients, industry peers, leading NGOs and public sector officials.

Header image: CC BY-NC-ND 4.0 by Adam Sébire / Climate Visuals

share this