At present there is so much happening in ESG and Climate Risk data management tools. It is fantastic that analysts and scientists are putting a great deal of time and research into building tools and models to help businesses understand where they are, and where they need to go. A great deal of the current focus is being piled into understanding investment and asset management portfolios, which will be used to become more ‘green’ or sustainable and over time through this process, will increasingly encourage businesses and asset owners to do the same. Couple this with regulatory drivers like the UK requiring businesses in all sectors to report on their financial impact of climate change, the pressure is not going to subside.  

Two things then have been looping through my mind in the past week. What we can measure we can manage therefore we can change, which is probably not new to many people in business and risk management or data analysis. And engaging with data and analysis tools highlight opportunities for change, which is also not a new concept in business management. So, stepping up to dig deeper and apply scientific and data analysis for climate risk impact specifically is a logical step for businesses. However, what might not be so evident to data and business analysts who don’t understand the urgency is this is an important consideration right now. This can be proven due to the level of emphasis global organisations and big companies are placing in research and collaboration to build useful tools and provide guidance.

Climate risk and ESG management is a growing area of risk understanding. One that will require embedding into risk management regimes across companies across all sectors. It may seem a burgeoning area of thought now, but it will be the norm as physical, transitional and liability risks due to climate change will continue to increase. It will also not lessen in need as each decade will require deeper collaboration and greater changes to achieve the targets and commitments as determined by the Paris Agreement.  

One final point is as there has been very little climate and resource management so far, we are in the infancy of what we need to do. However, the good news is while we are finding our footing using novel climate tools and data, the changes needed to achieve targets over the next decade or less will be the easy and large impact ones to achieve so can spur momentum and build trustworthy brands. It is the changes we will see later in this decade and into the 2030s which inevitably will have to capitalise on the foundations built now. Because impacts and risks are business wide and across all sectors, even though it is a relatively new focus, delaying gaining this insight and starting the process of change can put a business far behind the curve with competitors and tightening regulations.