Page 28 - Risk Management Bulletin Jan- Mar 2022

RMAI BULLETIN JANUARY - MARCH 2022

term strategies, minimizes unwanted surprises, and 3. https://www.dxc.technology/insurance/insights/
allows organizations to capitalize on opportunities. 139238-6_steps_for_preventing_insurance_fraud
4. https://www.weforum.org/agenda/2020/05/covid-
Understanding the potential impact assists in risk
19-risks-outlook saadia-zahidi/
management strategies and may reveal opportunities
5. https://www.swissre.com/risk-knowledge/
for new revenue streams. Identifying and evaluating
mitigating-climate risk/emerging-risks-trends-wake-
emerging risks empowers organizations to be forward-
coronavirus.html
thinking, leading to increased readiness and resilience
in the face of new and developing threats. 6. https://home.kpmg/kw/en/home/insights/2020/04/
emerging-risks-in kuwait-covid19.html
References
7. https://rims.nz/wp-content/uploads/2019/06/2019-
1. https://web.actuaries.ie/sites/default/files/erm Emerging Risks_4232019_142053.pdf
resources/
8. https://theonebrief.com/2019s-top-10-risks-new-
combating_insurance_claims_fraud_how_to_recognize
risks-emerge-established risks-evolve/
_and_reduce_opportunistic_and_organized_claims_fraud.pdf
9. https://www.bdo.com/insights/business-financial-
2. https://www.accenture.com/lv-en/~/media/
advisory/risk advisory/novel-coronavirus-(covid-
Accenture/Conversion Assets/DotCom/Documents/
19)-impact-and-risk-respo.
Global/PDF/Technology_8/Accenture How-
Effectively-Fight-Insurance-Fraud.pdf Courtesy : Risk Management Association of India
Climate change creates financial risks. Investors need

to know what those are

The U.S. Securities and Exchange Commission (SEC) voted recently to move a proposal forward that would
require publicly traded companies to disclose the financial risks they face from climate change. These rules
aim to bring corporate obligations for the disclosure of climate risk level with the requirements for disclosure
of other forms of financial risk. Doing so is long overdue and a critical step to ensuring investors have access
to information about the investment risks faced from climate. Those financial harms include "transition risks"
stemming from shifts in innovation, technology, and competitive landscape as well as "physical risks", such
as more severe wildfires to more frequent flooding.
Our financial system has always relied on publicly traded companies being transparent about the risks their
businesses navigate. This open accounting of business prospects is fundamental to the healthy operation of
our economy - reliable information is the bedrock of efficient markets. Publicly traded companies are required
to regularly issue disclosure reports that investors - from Wall Street to Main Street - rely on when choosing
where to invest their money seeking opportunity and avoiding unwarranted risk.
The consequences of climate change are creating new and growing forms of financial risk that investors need
to consider when choosing how to prudently allocate capital. In the last two years alone, the U.S. suffered
more than 40 weather disasters that inflicted at least $1 billion in economic damage each. A recent study
found that 215 of the world's largest companies face almost $1 trillion in climate-related risk. These climate
risks pose sprawling challenges, disrupting "food supplies, business operations, and economic productivity,
while damaging homes and personal property, public infrastructure, and critical ecosystems across the
country." The most recent assessment by the Intergovernmental Panel on Climate Change concluded similarly,
finding that "extreme events and climate hazards are adversely affecting multiple economic activities across
North America and have disrupted supply-chain infrastructure and trade."
Disclosure is necessary because climate risk is investment risk, and market participants have a significant
interest in understanding the size and scope of that risk. Other countries, from the U.K. to New Zealand to
Japan, have taken concrete steps to require that the mounting harms of climate change to their financial
systems are proactively identified and understood. Yet in the U.S., companies are not currently required to
disclose the financial risks created by climate change. Our existing rules are voluntary and inadequate. One
recent study found that only one percent of companies participating in a voluntary set of standards provided
sufficient information on their transition plans for the lower-carbon future.

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