Most international organizations were not designed to deal with the consequences of climate change. An overhaul of risk management, taking specific account of climate-related risks, is needed to ensure the continued operational effectiveness of UN bodies and other agencies.
Since the Second World War, a network of international organizations has evolved, mostly in the United Nations family, to promote cooperation on a range of issues crucial to global stability and human well-being: health, food, water, finance, migration, energy, international security and development.
These institutions have helped set the agenda on critical issues. They have facilitated international dialogue and functioned both as early-warning systems and as safety nets, particularly for the world’s most vulnerable people and communities. And they can point to important successes: smallpox eradication, arms control negotiations, disaster relief, and improvements in access to energy, water and food, to name but a few examples.
These organizations have been forced to evolve in the face of emerging risks and geopolitical change. In some instances, reforms have been driven by leadership within an organization, the emergence of new research, or high-profile summits. In others, unexpected crises, such as environmental disasters, conflicts or economic shocks, have provided the impetus for a new approach to risk management. Regardless of the specific trigger for reform, however, an organization’s institutional and decision-making structure determines its capacity to respond to shifting contexts.
Most international organizations already have ambitious objectives, and even large institutions have limited capacity relative to their missions. There is no shortage of risks in the global landscape for them to monitor – indeed, many of these risks are interconnected. But one risk – climate change – will aggravate the threats posed by all these interconnected risks. Climate change is placing pressure on all the world’s essential systems, potentially rendering unmanageable certain shocks that would otherwise be manageable.
In the World Economic Forum (WEF)’s Global Risks Report 2020, environmental or water-related risks accounted for more than half of the top 10 risks in terms of both likelihood and impact. Climate change is already affecting lives and livelihoods in all countries, including through more frequent and severe wildfires, droughts and hurricanes. It is projected to accelerate the spread of infectious diseases, destroy property and critical infrastructure, and limit access to food and water. In addition to risks that will cascade across society, there is also a significant risk of climate change triggering irreversible ‘tipping points’ such as the dieback of the Amazon rainforest or the collapse of the Western Antarctic ice sheet. The rate of global sea level rise is accelerating well above current projections, and the retreat of Arctic sea ice has been much more rapid than predicted.
In the World Economic Forum (WEF)’s Global Risks Report 2020, environmental or water-related risks accounted for more than half of the top 10 risks in terms of both likelihood and impact.
Nor are physical impacts and their related effects the only concern. Governments, companies and international organizations are also facing ‘transition risks’ associated with the policy changes needed to respond to climate change. Major economies, including the US, China, the European Union and the UK, have pledged to shift away from the use of fossil fuels towards net zero emissions. Achieving this shift will bring about enormous socio-economic changes that will impact industries, labour markets and the financial sector.
Most international organizations were not designed to deal with the consequences of climate change or transition risks. But climate change may have profound impacts on their ability to operate in the future. It will increase demand for their services, sap available funding, undermine the effectiveness of programmes, impact staff safety and security, and hinder their ability to fulfil their mandates.
About this paper
This paper is an attempt to ‘climate stress test’ the international system and provide an early measure of its level of preparedness for the consequences of climate change. To this end, the authors have studied the extent to which international organizations are specifically integrating climate change risk into their strategic planning and operations. This research has been guided by the following questions:
- Does the organization mention climate change in its organizational strategy or external reports?
- Does the organization have a risk management framework? Is climate change included in the framework?
- Does the international organization measure its own performance against a set of climate risk indicators?
The findings presented here are based on an extensive, although not exhaustive, desk review of official publications from roughly two dozen international organizations. Focus was placed on a ‘shortlist’ of organizations working to improve critical climate-affected systems in areas that include economic development, public health, the food system, the energy system, peacebuilding and security. The literature review included strategic planning documents and public-facing reports, as well as shorter blogs or articles. The desk-based research was followed by in-depth interviews with staff at most of the organizations reviewed, typically with a representative responsible for organizational risk management, climate change or both. In addition, the paper was informed by several workshops, including events held as part of the Berlin Climate Security Conference and London Climate Action Week 2020.
Chapter 2 begins with a definition of the term ‘climate risk’ and an explanation of what it means for international organizations. A distinction is made between strategic and operational risks, and between the responses to each. This is followed in Chapter 3 by an overview of the concept of enterprise risk management (ERM). Chapter 4 summarizes the findings from our mapping of international organizations’ approaches to climate risk management. The paper concludes in Chapter 5 by offering recommendations for how international organizations can continue to achieve their missions by strengthening their climate risk management frameworks.
