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Facing the Climate Challenge

Introduction

The next decade represents one of the most important moments in history to make the shifts in investment and business models needed to keep global temperature rise below 1.5°C and prepare for a warmer world. As the leader in the complex and increasingly interconnected dynamics around risk, strategy, and people, Marsh McLennan is helping our clients embed climate change strategies into every aspect of their businesses, from navigating the transition to a resilient, low-carbon economy to managing the physical risks associated with extreme weather events.

Read Marsh McLennan’s Climate Change Statement

We help capital providers and corporations to understand and quantify climate risks, leading to better investment, lending and CAPEX decisions. We work with businesses and financial institutions to set and execute low-carbon transition strategies that collectively chart a path to net-zero. And we advise our clients on how to prepare, engage and empower their workforces in order to execute the profound transformations required.

We have been advising the world’s leading companies for 150 years, through periods of huge turbulence and upheaval. We understand that catastrophic climate change – and the speed and scale of transformation needed to avoid it – threaten disruption unlike anything that has come before. Marsh McLennan is helping its clients navigate a path from risk to opportunity, and we believe that Risk, Strategy and People will be the key to progress and to competitive advantage.

 

Featured Content

From commitment to action

Perspectives from Marsh McLennan experts on the decarbonization of businesses and energy systems

From commitment to action

Perspectives from Marsh McLennan experts on the decarbonization of businesses and energy systems

 

Takeaways and Insights from COP27

Achieving the net zero transition and addressing the changing physical risk levels that we are already observing across the world are the two key strands of climate action currently debated at COP27.  Significant efforts are needed to respond to both. As delegates from across the world, industry and financial sectors, civil society and academia come together in Sharm El Sheik to seek new solutions and form alliances we share Marsh McLennan perspectives on three key COP27 challenges: 

The adaptation challenge

The example of flooding illustrates why limiting global warming is so important.  And it shows what tools are available to adapt to the changing risks and become more resilient. Flooding is the most pervasive among natural disasters, with more than 250,000 lives lost and damages exceeding $1 trillion globally since 1980. Flood risk in on the rise due to climate change and the increasing concentration of people and assets in exposed areas, yet its many cascading impacts on socioeconomic, financial, and environmental systems routinely lead to an underestimation of its true costs. Despite advancements in markets, solutions, and data, current approaches to flood risk management are often inadequate and not future-oriented. Marsh McLennan’s Flood Risk Index leverages information from international institutions and academic research to provide a global overview of the threat of flooding, show how this is set to increase due to climate change, and present solutions for resilience. According to the Index, 18% of the world’s population is currently threatened by flooding, a percentage set to double in a 2 °C warming scenario. The tool also presents information on infrastructure at risk. For example, 23% and 41% of the global energy generation capacity is estimated to be located in flood-prone areas under present-day conditions and in a 2 °C warming scenario, respectively.

The smart grid challenge

Achieving the net zero transition depends heavily on the roll-out of smart energy grids. Power grids worldwide are under pressure from a more volatile climate, growing demand for renewable energy, and rising urbanization. The Making the Switch: Navigating the Smart Grid Transition report discusses how innovative combinations of advanced technologies will accelerate innovation towards a "Smart Grid 2.0" that can address legacy operational challenges and create commercial opportunities across the energy sector. This report also explores ways in which existing energy grids can benefit from smart technologies and provides practical guidance for overcoming challenges as energy system players navigate this transition. 

The need for partnerships

Moving to a ‘whole-of society’ response to the climate challenge is essential. In this BRINK article, Richard Smith-Bingham, Executive Director of Insights, Marsh McLennan Advantage shows that governments and administrations must not only focus on enhancing the capabilities and connective tissue within the public sector, but also on mobilizing the broader ecosystem that will deliver the outcomes desired. Governments inherently lack the financial and other resources needed to address complex crises by themselves. Indeed, claiming too much of that role for the public sector undermines the goal of building resilient economies and societies. More specifically, it can reinforce moral hazard and squander opportunities to mobilize the capabilities and energies that exist in other sectors—especially the private sector—to address critical challenges.

Our Latest Insights

Highlighted reports and articles from across the business

Fulfilling a Legacy of Societal Risk Management

This initiative applies insurance sector capabilities to a series of projects that show the power of insurance

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High Seas: Enabling a Climate Resilient Suez Canal

Physical climate change-related risk impacts of global shipping, and methods to build resilience at a local level

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Natural Catastrophe Protection Gap

Collaborative innovation between the public and private-sector insurance industry is vital to the protection gap in Asia

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A Case of Impact Investing

Investors are increasingly opting to go beyond ESG considerations to support positive change through impact investing

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The Decade of Delivery

Companies’ impacts on climate and nature are linked – and need to be addressed in collaboration with their value chain

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The Insurance Industry and the Middle East

Explore how the insurance industry can play a positive role in building a more resilient Middle East

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Embracing Nature

This report outlines the importance of the nature agenda and the different risks that companies face

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Too Hot to Work

Agricultural workers are a significant part of the workforce and they are especially susceptible to extreme heat

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Journey To Sustainability

Procurement teams are progressing on sustainability and the areas they should focus on in the years ahead

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Advancing the transition

Seeking to mitigate risk and driving adaptation beyond COP27

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Podcasts, webinars and videos

Finance Sector Must Lead Way To Lower CO2 Emissions

Episode 3 shares a compelling vision for an aggressive action to meet the UN’s sustainability goals to lower C02 output and mitigate the worst effects of climate change

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Deep Connections (ESG and Risk Management)

Dive into the environmental, social, and governance risks for technology companies and the importance of a strong risk mitigation framework around them

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Is Climate Change to Blame for Increasing Losses?

Evidence indicates that climate change is only one factor in increasing insured losses. Experts share their insights on this complex issue

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Regenerate and Restore

In this episode, a discussion about the recent Investor Group on Climate Change (IGCC) paper for investors on the circular economy

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The Hype around Hydrogen - Part 2

The Energy Current Podcast series continues its discussion regarding hydrogen's role in a clean energy future

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From Targeting Inaction to Ineffective Action

Climate litigation has broadened to include disingenuous climate commitments and greenwashing

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Climate Transition Talks

Hear from climate and sustainability leaders from some of the world's largest corporations on how they are turning their commitments into action.

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