Climate has for many years been a driver of political risk. We are all familiar with the distressing TV images of the result of famine and floods driven by erratic weather patterns and learnt of the associated instability of governments and the state. The prospect of increasing temperatures and rising sea levels is likely lead to more areas of the globe being impacted by erratic weather, which in turn will drive more food and fuel insecurity leading to political instability in a greater number of vulnerable countries. Meanwhile, as global trade increases, organisations are increasingly reliant on the availability of global workforces as part of their supply chains whilst distribution channels are also expanding internationally.
As organizations consider how they approach ESG and the climate transition we consider a number of different scenario’s ranging from an ordered approach to one where there is no action positive action on climate change. What will be the economic and geopolitical implications of each of these scenarios and what actions can businesses take to be more resilient in the face of these challenges.