How to prepare for a disrupted climate transition

Disorder...Disruption…Disadvantage. This is the dystopian future that is forecast to become a reality if world leaders continue to tackle climate change without urgency. Prudent risk management might need to include preparing for such a disorderly climate transition.

This piece dips into these challenges as we look at the concept of a disorderly transition; a stark warning issued in the World Economic Forum’s 2022 Global Risks Report.

What is a disorderly climate transition?
Why is this relevant to my organisation?
Expectations of internal audit
Readying for a disorderly transition

I don’t have time for this

If the pandemic has taught us anything it’s that nature doesn’t wait.

Leaders and decision makers across sectors have faced arguably the most testing time of their career...including chief audit executives. It’s also been a time of great learning, particularly in terms of managing risk, implementing change and motivating employees. Now is the time for internal audit to build on this and continue the momentum on advising on organisational resilience, to provide assurance that it is fit for the future.

If the prospect of a dystopian future sounds too far off and nebulous, take comfort in drawing parallels with the familiarity of managing information security risk. Both are rich in known facts about vulnerabilities yet are prone to new weaknesses being identified. A data breach WILL happen but WHEN is the uncertainty. Climate impacts WILL happen but WHEN and to WHAT severity is the uncertainty.
Being ready to respond is essential. A

What is a disorderly climate transition?

Climate transition is about shifting to a low-carbon economy. It’s one of three risks of the climate emergency.

  1. Climate risk is physical. It includes immediate extreme weather events and chronic trends such as prolonged drought and rising sea levels. It’s also transitional due to the shift to a low-carbon, sustainable…