Climate adaptation and risk assessment

Climate adaptation and risk assessment are the main themes of a recent ICMM report we read during the holidays.

Our take-away from the Climate adaptation and risk assessment report

The ICMM report notes that physical climate-change risks and opportunities can impact mining companies in a multitude of ways. Examples are:

• operations,
• production,
• financial,
• social and finally
• environmental.

Thus, the risk landscape of companies can change quite significantly due to shifts in probabilities of occurrence and consequences of climate-related events.

The report also rightly points out that:

• Building climate resilience does not require to reinvent the wheel.
• Climate change has to be integrated in ERM (Entreprise Risk Management) approaches
• Climate change resilience has to consider all components of the mining system, thus fostering a “silo-free” look at reality.

Building climate resilience by integrating ERMs

In order to build sustainable and rational resilience in a complex system like a mine multi-hazard, convergent quantitative approaches are necessary.

Indeed, climate related events have the potential to hit the:

• supply chain at various levels. For example: ingress/egress of key materials, products, personnel, contractors, etc.
• Operations. For example: excavation, hauling, etc.
• Waste management during operations. For example: dumps, ponds, tailings storage facilities.
• Closure.

Thus, as stated above, risk assessments have to deliver enough granularity to allow prioritization. In addition they need to support decision-making on multiple simultaneous fronts. As a result they will allow to decide where and when to allot resilience enhancement funds. This will allow to pursue, in some cases, new opportunities.

If unmanaged climate-related risks will inevitably weaken company’s finances and their CSR (Corporate Social Responsibility) and SLO (Social License to Operate).

Ill conditioned resilience enhancements, like, for example, those resulting from siloed-approaches will bear their legacy of unpleasant side effects toward the future.

Climate adaptation and risk assessment

The report suggests a stepped approach to identify climate risks and opportunities. Simultaneously it recognizes that each company may apply a different philosophy to ERM and resilience building.

The stepped approach emphasises the need to use monitoring and forecasting techniques while integrating existing ERMs to study the complex issues related to climate change.

Riskope’s Optimum Risk Estimates (ORE) approach is a valid and effective tool to carry out rational convergent, quantitative, drillable and updatable risk assessments. These enable companies to include climate change in their ERM and preserve or even enhance their value.

ORE has been successfully deployed by Riskope to include climate risk landscape studies around the world in various industries.

Contact us to learn how.

Tagged with: Climate adaptation, climate change, ERM, Risk Assessment

Category: Consequences, Risk analysis, Risk management, Uncategorized