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Perceived value in a climate risk reality


The subjectiveness of risk, whether of actual certainty or experiential awareness, warrants interdisciplinary perspective and judgments before organizations address issues such as climate change. Climate-related risks are often subject to different perceptions and interpretations serving to determine the materiality of disconnect between risk and sustainability best practices.


The emergence of environmental, social, and governance (ESG) strategies raise concerns about the following risk management factors:


  1. Physical risk (or pure risk) exposure to natural causes of uncontrollable disasters

  2. Transition risk exposure toward zero-carbon emission economies

  3. Resiliency factors (resource planning, adaptability, responsiveness, etc.)


So far, the cognitive dissonance occurring among financial risk managers appear representative of outdated analysis and unrefined communications, given the increased importance of ESG activity to rating systems.



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