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Climate Risk and Resilience

The global challenge of making an orderly transition to a low carbon, climate resilient economy dictates that climate considerations are central to how public and corporate organizations are run. It is also a core influence on how they interact with their multiple stakeholders. The first essential step for most organizations is to quantify how climate change will impact them in order to build climate adequate and resilient solutions.

Willis Towers Watson takes its social and planetary responsibility seriously and is actively contributing to how organizations respond. Our clients, colleagues and other stakeholders expect us to conduct business with integrity, in an environmentally and socially responsible manner and with the highest ethical standards. This is reflected in our commitment to ESG.

Our insights and advice are based on our deep weather and climate analytical experience, our extensive academic, research and institutional relationships, and our multi-discipline expertise and capabilities. We are supporting private and public organizations, from corporations to governments, to take greater control of their climate-related risks and manage their return on investment from mitigation measures.

Nor are we simply a service provider; our rigorous approach and recognized experience are enabling us to proactively help shape the global community’s response to climate risks through our own and cooperative initiatives. These include:

  • chairing the resilience session at the Paris Climate Summit
  • our contribution to the work of the Task Force on Climate-related Financial Disclosures (TCFD)
  • our founding with the World Economic Forum of a public/private coalition aimed at improving climate resilience in investment decision-making
  • our leadership role in efforts to address the insurance protection gap in many developing countries, and
  • our $50 million investment in the Willis Research Network over the last decade to support open climate and natural hazard research.
of world gross domestic product is exposed to direct climate-driven risks

Source: Cambridge University Centre for Risk Studies’ 2018 estimate

The drive for climate action

Dealing with climate change is a responsibility we all share – we believe we all are the ‘they’ who must act. For public and commercial organizations, further specific impetus and motivations for action come from numerous sources, including: legal, liability and regulatory; financial; the need to build asset and infrastructure resilience; corporate responsibility; and reputational impact.

Reflecting this diversity of drivers, climate risk is truly multi-dimensional. The potential consequences vary from physical and economic impacts to liability risks and risk arising from the pace of transition to a low carbon economy.

Circle depicting the following: physical damage to public and private sector assets, change in resource prices, changes in demand for products/services, impact on pensions, emergency response cost, geopolitical transition risks, humanitarian loss, increasing costs of commercial operations, supply chain disruptions, loss productivity, reduced financial investment and economic loss, and climate change litigation
Circular graphic depicting various potential risks arising from climate risk: physical, financial, operational, transition and liability.
Climate risks create impacts at macro and micro levels

There is no off-the-shelf solution. To respond effectively, organizations will need to adapt their management of climate risks in several areas, such as:

  1. 01

    Assessment and quantification in the short and long term

  2. 02

    Transition and resilience planning

  3. 03

    Financial reporting and disclosure

  4. 04

    Investment strategy

  5. 05

    Capital management

  6. 06

    Risk hedging and transfer

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How Willis Towers Watson can help

Willis Towers Watson's multi-discipline approach helps you understand and quantify the climate risks that affect your organization and provides implementable adaptation and mitigation solutions.

The extra value we bring comes from recognition of the interplay of data and sophisticated analytics with law, regulation and policy, and how these factors impact the allocation of capital.

Specific service offerings that underpin our climate risk management credentials include:

  • Risk and scenario modelling of physical, catastrophe, liability and transition risks using the latest science
  • Climate risk audits and stress testing
  • Risk transfer and financing solutions – broking and insurance product development, reinsurance and insurance-linked securities.
  • Asset analysis, review and allocation based on environmental, social and governance (ESG) principles and developing more sustainable, climate resilient portfolios
  • Analytical support for climate-related financial reporting and regulatory requirements, e.g. the Task Force on Climate-related Financial Disclosures (TCFD); the UK PRA/FCA Climate Financial Risk Forum
  • Developing talent and rewards strategies to align with corporate citizenship objectives
  • The activities of the Willis Research Network, our Capital, Science and Policy practice and the Thinking Ahead Institute in building knowledge and understanding of climate risks and resilience.

Our heritage, skills and connections across markets support our focus on helping organizations navigate climate risk and implement an orderly transition, seize opportunities from the changing world and optimise value in the years and decades to come.

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Thinking Ahead Institute

The Thinking Ahead Institute aims to ‘change investment for the better’. 

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