Climate change a pressing issue for risk managers: FERMA

Risk managers must analyze their company’s exposures to identify mitigation measures that meet challenges posed by the changing face and severity of natural catastrophes, suggests Gaëtan Lefèvre, chairman of the Belgian risk management association, BELRIM.

Analyzing and mitigating the effects of climate change, such as floods and windstorms, have become pressing issues for risk managers, says Lefèvre, who will moderate a workshop on climate change at the Federation of European Risk Management Associations’ (FERMA) upcoming Risk Management Forum.

As part of the workshop, attendees will receive an introduction to “cindynics,” known as the science of danger, as a method for approaching the multiple interactions that create the climate and its relationship with human activity, notes a statement issued Monday by FERMA, which brings together 22 national risk management associations in 20 European countries.

“We see how natural catastrophes are changing, becoming more severe. The problem is moving from the scientific understanding of what is happening to the climate and translating it into a risk management application in business,” Lefèvre says in the statement. “It is a pressing issue for risk managers to analyze their company’s exposures and what mitigation measures are possible,” he adds.

For most companies, the business interruption consequences of climate-related perils such floods and windstorms are likely to be more serious financially than as a result of physical damage, Lefèvre suggests.

But even without the influence of climate change, the floods in Thailand and earthquake and tsunami in Japan two years ago made businesses aware of interdependences, how complex the links are between businesses, and how widespread the losses can be when something like this happens, he adds.