ABSTRACT
Climate change has been recognized as a business risk, at least for major greenhouse gas (GHG) emitters, for the last 20 years. It is not difficult to identify how climate change can translate into business climate risk: physical risk, brand risk, policy risk, structural risk, and liability risk. The relative importance of these risks will differ not only based on which future climate scenario one envisions, but also according to the business sectors and specific company one is analyzing. Companies implicitly or explicitly employing one or more of the assumptions in their risk management strategies are rolling the climate risk dice and assuming that the dice are ‘loaded’ toward lower-risk outcomes. There are multiple reasons that companies want to make this assumption; these reasons are compounded by cognitive barriers in human decision-making. It is certainly possible that even fair dice being rolled just a few times can generate the outcomes assumed by business.
