Reputational risk top concern for companies, claims Airmic

Seventy-seven per cent of respondents to the Association of Insurance and Risk Managers in Industry and Commerce (Airmic)’s latest Big Question survey said their organisations model and quantify reputational risk, making it the top climate transition risk that their organisations measure.

The other key categories of transition risks as identified by the Task Force on Climate-related Financial Disclosures (TCFD) are policy and legal risks, technology risk and market risk.

“Organisations including the World Economic Forum are warning of a disorderly climate transition,” said Julia Graham, chief executive of Airmic. “There is a risk of divergence on the direction of travel between governments which are setting climate targets, and businesses. To preempt any barriers to much-needed cooperation, Airmic is doing its part to foster more dialogue between insurers, brokers, and insurance buyers and risk professionals, to ensure that climate initiatives have the right intended consequences.”

In collaboration with KPMG and the Lloyd’s Market Association, Airmic has embarked on a project examining how the insurance sector as a whole can better support organisations through the climate transition. Airmic seeks to bring risk professionals together to work through some of these issues facing them and their organisations, through platforms such as its Climate Special Interest Group.

“With the rise in cases of greenwashing reported around the world, reputational risk – as it relates to the climate transition – has emerged as a top concern for Airmic members,” said Leigh-Anne Slade, head of media, communications and interest groups, Airmic. “Given the velocity of social media today, corporate reputations can be torn to shreds in minutes. Risk professionals must be on top of the risks associated with the climate transition.”

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