Roughly two dozen international organizations, mostly in the United Nations (UN) family, foster cooperation and set the global agenda on a range of critical issues, including health, water, energy, environment, food, migration, security, and development.
Collectively they provide the world with a critical safety net and, in the words of the second UN Secretary-General Dag Hammarskjöld, the purpose is not to lead humanity to heaven but rather to ‘save it from hell’.
Climate change certainly provides a potentially hellish problem – happening everywhere, at all scales, and cascading across borders and sectors with unpredictable impacts. It is already damaging critical infrastructure, undermining economic growth, and displacing entire communities, and is an existential challenge for low-lying island states and coastal areas.
But our international ‘safety net’ was largely built between the end of the Second World War and the 1970s, before the impacts of anthropogenic climate change were widely understood, leaving the question of whether this system is fit for purpose in a climate-changing world.
Raising the alarm
Chatham House, together with E3G, has been investigating how climate risks impact the international system as part of a collaboration between British and Chinese research groups. Organizations such as the UN Framework Convention on Climate Change, the World Meteorological Organisation, the World Bank, the World Health Organization (WHO), and the UN Development Programme play a critical role in raising the alarm on how climate change affects global well-being, and also coax governments towards action to address the challenge of mitigating greenhouse gas emissions and adapting to climate impact.
But climate change also presents a direct strategic challenge to the ability of the international system to fulfil its core functions. Climate change’s direct risks such as floods, droughts, storms, indirect risks such as hunger, increased mortality, fragile livelihoods, and systemic risks such as instability and mass migration all have a profound impact on operational effectiveness – increasing demand for services, undermining the effectiveness of programmes, and impacting staff safety and security.
As another multi-faceted threat, the COVID-19 pandemic has provided a full ‘stress-test’ of how the international system deals with risk, and the results are not encouraging. The category of systemic challenges with the potential to affect an entire organization are known as ‘enterprise risks’ and are distinguished from ‘point source’ risks such as the corruption, terrorist, or funding threats which typically concern risk management professionals. Point source risks need to be dealt with but do not necessarily have a bearing on the overall functioning of the organization.
The UN recognized the importance of good risk management more than 15 years ago and, over the past decade, several international organizations have introduced enterprise risk management (ERM) systems into their operations. But progress on implementation is patchy as some organizations have elaborate, empowered structures whereas others are just beginning to develop their ERM systems.
There is little focus on the impacts of climate change at a strategic level or how impacts cascade across sectors. Of almost two dozen organizations surveyed, 15 have ERM systems but only eight of them have public risk registers and just six of those list climate risks as challenges to be managed.
This may inhibit the ability of the international system to deliver progress on the Sustainable Development Goals (SDGs) because climate change needs more than just an ‘end of pipe’ sticking-plaster approach at the level of individual projects or as a response to specific risks.
International organizations must move from a reactive ‘defence-oriented’ mindset to an ‘offensive-oriented’ mindset, and this requires understanding how the climate is changing, what that means for their organizations at a strategic level, and how they can better institutionalize climate risk management, both within international organizations and across the institutional siloes of the international system.
Ultimately how international organizations manage climate risk is critical to their ability to deliver their mandate, improve the delivery of services, achieve value for money and avoid unwelcome surprises. It may not take humanity to heaven, but it may succeed in helping avoid the most hellish of climate scenarios.