Climate Change Risk Management - Final

Climate Change & Risk Management
Prepared by Dr. Mohamed Lashin
• Ph.D. Total Quality Management of Risk Management (IRM)

• Ph.D. Risk Management • Member of ISO TC 176 (ISO 9001),
• Executive Manager of ISC Egypt, a ISO TC 283 (ISO 45001) and Head of
certification and conformity Delegation ISO TC 262 (ISO 31000)
assessment firm, licencee of • Certified Lead Auditor of QMS ISO
DeuZert (Germany), ISC Global 9001, QMS ISO 29990, OHSMS ISO
(Australia) and RICI, (Canada). 45001, EMS ISO 14001 and BCMS
• Lecturer of higher education – ISO 22301.
Cairo university. • Registered in the International
• Member of the Egyptian Society for Register of Certified lead Auditors
Quality (ESQ), the American and trainers (IRCA)
Society for Quality (ASQ), the • Registered in the organization of
American Society for Safety certified lead auditors and trainers
Engineers (ASSE) and the Institute (Exemplar Global - RABQSA)
Risk Management - Climate Changes 2
Causes and Effects of Climate Change

Climate change and risk management
• Each year there are climatic events that represent risks to

people and organisations.
• These risks arise from ‘normal’ day-to-day, seasonal, and

year-to-year variability in climate as well as regional climate
differences.

• Most organisations have practices and strategies in place to

deal with this routine climate variability.
• For these organisations, climate variability will continue to

raise challenges and risks that have to be managed.

• However, when managing climate variability in the future,

organisations cannot simply rely on the assumption that the
prevailing climate will be more or less the same as it was
over the past 50 or 100 years.
• Climate change is likely to invalidate this assumption, with

changes in both average conditions and the frequency and
severity of extreme climate events.

• We can expect to live and operate in a climate that is

• warmer,
• with different patterns of rainfall,
• less available moisture retained in the soil and
• more severe storms

• While experience in dealing with natural climate variability

may be valuable in formulating strategies for dealing with
climate change, there are important differences.
• With climate change, the timescale is longer, the affects may

be more far reaching and the changes will not go away or be
reversed in the foreseeable future.

• As climate changes, human behaviour will need to (and will)

adapt to accommodate it – that is the natural tendency of
people and organisations.
• Effective adaptation however, requires an awareness of the

risks posed by climate change and, importantly, an
understanding of the relative significance of those risks.

risk means
"effect of uncertainty on intended outcomes (objectives)"
• “uncertainty” is not about how things will happen, but is

more about our state of knowledge.
• It is more about our “lack of knowledge” about how things

will turn out.
• Events will happen, we just don't know which, how and

when.

risk means
• Uncertainty is our ignorance.
• Uncertainty is "the state of deficiency, even partial, of

information related to understanding or knowledge of an
event, its consequence or likelihood."
• If we replace this meaning of uncertainty in the definition of

risk, we come up with:
Risk = the effect of ignorance on objectives.

risk means
• But what about "effect"? What does this word mean?
• ISO 31000 defines effect as "a deviation from the expected -

positive or negative".
• So if we use that definition, and insert it into the definition
of risk, we get:
Risk = the deviation from the expected, due to our

ignorance, on objectives.

what is risk management
• Coordinated activities to direct and control an organization

with regard to risk.
It is an integrated and joined up approach to managing risk

across an organisation and its extended networks.

Major aspects of climate change
• the present global climate is significantly warmer than at the

beginning of the 20th Century, with global temperatures
having increased by around 0.6˚C.
• it is likely that 1990-1999 was the warmest decade in the last

1,000 years.

Major aspects of climate change
• most of the observed warming in the last 50 years is

attributable to human activities
• notably the release of greenhouse gases, such as carbon dioxide,
methane and nitrous oxide, into the atmosphere.
• climate change will continue for decades or even centuries

to come, even if large scale action to mitigate greenhouse
gases was taken in the near future.
• due to the long atmospheric lifetime of major greenhouse gases
and time lags in the ocean-atmosphere system.

Examples – risks arising from climate change
• For urban planners, more frequent heatwaves may increase

the stress on emergency services and hospitals while more
intense storms and rising sea levels may increase the
vulnerability of coastal housing and infrastructure.

• For the electricity sector, an increase in the number of days

over 35˚C and over 40˚C would further stimulate air-
conditioning demand.
• Increased peak demands on generation and distribution

systems will challenge system reliability.
• Since investment needs are strongly driven by peak demand

rather than by average levels of consumption, the per unit
cost of electricity can be expected to increase in response to
the increased peak demand.

• For agriculture, increases in temperature and net reductions

in average rainfall across the area could make drought
sequences more common, while the impact of increased
temperatures would make them more damaging to plant
and livestock viability and production.
• To the extent that these increases in drought frequency or

severity result from continental impacts, then drought
management based on shipping livestock and fodder
between areas of localised drought may not be possible.

• For local government, climate change may affect the
economic base of the local region, for instance, by reducing
the viability of pasture growth and therefore carrying
capacity or perhaps causing the spread of pests and diseases
previously limited to other areas.
• Climate change may also create new demands for services,

for instance, due to more frequent heatwave conditions.
• Thus, some local governments may be faced with a reduced

ability to raise income accompanied by increased demands
for services, ranging from geriatric care to emergency
services.

ISO 31000:2018
Risk Management
Principles and Guidelines

scope of ISO 31000
• ISO 31000 is an international risk management standard.

• It can be used by any organization no matter what size it is
or what it does.
• It can be used by both public and private organizations and
by groups, associations, and enterprises of all kinds.
• It is not specific to any sector or industry and can be applied
to any type of risk.

scope of ISO 31000
• ISO 31000 can be applied to the achievement of any and all

types of objectives at all levels and areas within an
organization.
• It can be used at a strategic or organizational level to help
make decisions and can be applied to all types of activities.
• It can be used to help manage processes, operations,
functions, projects, programs, products, services, and
assets.
• However, exactly how the organisation apply ISO 31000 is up
to the organisation and will depend on the organization’s
needs, objectives, and challenges, and should reflect what it
does and how it operates.
Risk Management Architecture
risk management principles
risk management framework
risk management process

risk
management
principles

risk
management
framework

risk
management
process

Impacts associated with changes to climate
variables
Change to climate Examples of impacts
variable
Higher mean > Increased evaporation and decreased
temperatures water balance.
> Increased severity of droughts.
> Reduced alpine winter snow cover.
> Reduced range of alpine ecosystems
and species.
> Increased stress to coral reefs.

variables
variable
Higher maximum > Increased incidence of death and
temperatures, serious illness, particularly in older age
more hot days and groups.
more heat waves > Increased heat stress in livestock and
wildlife.
> Increased risk of damage to some
crops.
> Increased fire danger (frequency and
intensity).
> Increased electric cooling demand and
reduced energy supply reliability.
variables
variable
Higher minimum > Decreased cold-related human
temperatures, morbidity and mortality.
fewer cold days > Decreased risk of damage to some
and frost days crops and increased risk to others.
> Extended range and activity of some
pest and disease vectors.
> Reduced heating energy demand.

variables
variable
Decrease in > Decreased average runoff, streamflow.
precipitation > Decreased water quality.
> Decreased water resources.
> Decrease in hydro-power potential.
> Impacts on rivers and wetland
ecosystems.

variables
variable
Increased severity > Decreased crop yields and rangeland
of drought productivity.
> Increased damage to foundations
caused by ground shrinkage.
> Increased forest fire danger

variables
variable
Decreased relative > Increased forest fire danger.
humidity > Increased comfort of living conditions
at high temperatures.

variables
variable
More intense rain > Increased flood, landslide and
mudslide damage.
> Increased flood runoff.
> Increased soil erosion.
> Increased pressure on disaster relief
systems.

variables
variable
Increased intensity > Increased risk to human lives and
of cyclones and health.
storms > Increased storm surge leading to
coastal flooding, coastal erosion and
damage to coastal infrastructure.
> Increased damage to coastal
ecosystems.

variables
variable
Increased mean > Salt water intrusion into ground water
sea level and coastal wetlands.
> Increased coastal flooding (particularly
when combined with storm surge).

Climate change risk management

Risk assessment techniques

Risk assessment
Risk assessment is that part of risk management which provides a
structured process that identifies how objectives may be affected,
and analyses the risk in term of consequences and their
probabilities before deciding on whether further treatment is
required.
Risk assessment attempts to answer the following fundamental
questions:
• what can happen and why (by risk identification)?
• what are the consequences?
• what is the probability of their future occurrence?
• are there any factors that mitigate the consequence of the risk or that
reduce the probability of the risk?
• Is the level of risk tolerable or acceptable and does it require further
treatment?
Initial assessment and detailed analysis

Initial assessment and detailed analysis

Example – key elements risk assessment

Risk priority levels

selection of risk assessment techniques
• Risk assessment may be undertaken in varying degrees of

depth and detail and using one or many methods ranging
from simple to complex.
• In general terms, suitable techniques should exhibit the
following characteristics:
• it should be justifiable and appropriate to the situation
or organization under consideration;
• it should provide results in a form which enhances
understanding of the nature of the risk and how it can
be treated;
• it should be capable of use in a manner that is traceable,
repeatable and verifiable.
types of risk assessment techniques
1. Brainstorming 11. Business impact analysis 22. Reliability centered
2. Structured or semi- (BIA) maintenance
structured Interviews 12. Root cause analysis (RCA) 23. Sneak circuit analysis
3. Delphi 13. Failure mode effect 24. Markov analysis
4. Check-lists analysis (FMEA) 25. Monte Carlo simulation
5. Primary hazard analysis 14. Fault tree analysis 26. Bayesian statistics and
6. Hazard and operability 15. Event tree analysis Bayes Nets
studies (HAZOP) 16. Cause and consequence 27. FN curves
7. Hazard Analysis and analysis 28. Risk indices
Critical Control Points 17. Cause-and-effect analysis 29. Consequence/probability
(HACCP) 18. Layer protection analysis matrix
8. Environmental risk (LOPA) 30. Cost/benefit analysis
assessment 19. Decision tree 31. Multi-criteria decision
9. Structure « What if? » 20. Human reliability analysis analysis (MCDA)
(SWIFT)
21. Bow tie analysis
10. Scenario analysis
applicability of tools used for risk assessment
Tools and techniques Risk assessment process
Risk Risk analysis Risk evaluation
Identification Consequence Probability Level of risk
Brainstorming SA NA NA NA NA
Hazard and SA A A A A
operability studies
(HAZOP)
Hazard Analysis and SA SA NA NA SA
Critical Control Points
(HACCP)
Environmental risk SA SA SA SA SA
assessment
Structure « What if? SA SA SA SA SA
» (SWIFT)
Business impact A SA A A A
analysis
Root cause analysis NA SA SA SA SA
Scenario analysis SA SA A A A
Fault tree analysis A NA SA A A
Event tree analysis A SA A A NA
Cause and A SA SA A A
consequence analysis
Cause-and-effect SA SA NA NA NA
analysis
Consequence/probab SA SA SA SA A
ility matrix Risk Management - Climate Changes 46
Scenario analysis Technique

Overview
• Scenario analysis is a name given to the development of
descriptive models of how the future might turn out.
• It can be used to identify risks by considering possible future

developments and exploring their implications.
• Sets of scenarios reflecting (for example) ‘best case’, ‘worst

case’ and ‘expected case’ may be used to analyse potential
consequences and their probabilities for each scenario as a
form of sensitivity analysis when analysing risk.

Overview
• The power of scenario analysis is illustrated by considering
major shifts over the past 50 years in technology, consumer
preferences, social attitudes, climate changes etc.
• Scenario analysis cannot predict the probabilities of such

changes but can consider consequences and help
organizations develop strengths and the resilience needed to
adapt to foreseeable changes.

Use
• Scenario analysis can be used to assist in making policy
decisions and planning future strategies as well as to
consider existing activities.
• It can play a part in all three components of risk assessment.
• For identification and analysis, sets of scenarios reflecting

(for example) best case, worst case and ‘expected’ case may
be used to identify what might happen under particular
circumstances and analyse potential consequences and their
probabilities for each scenario.

Use
• Scenario analysis may be used to anticipate how both
threats and opportunities might develop and may be used
for all types of risk with both short and long term time
frames.
• With short time frames and good data, likely scenarios may
be extrapolated from the present.
• For longer time frames or with weak data, scenario analysis

becomes more imaginative and may be referred to as
futures analysis.

Use
• Scenario analysis may be useful where there are strong
distributional differences between positive outcomes and
negative outcomes in space, time and groups in the
community or an organization.

Inputs
• The prerequisite for a scenario analysis is a team of people
who between them have an understanding of the nature of
relevant changes (for example possible advances in
technology) and imagination to think into the future without
necessarily extrapolating from the past.
• Access to literature and data about changes already

occurring is also useful.

Outputs
• There may be no best-fit scenario but one should end with a
clearer perception of the range of options and how to
modify the chosen course of action as indicators move.

Strengths and limitations
• Scenario analysis takes account of a range of possible futures
which may be preferable to the traditional approach of
relying on high-medium-low forecasts that assume, through
the use of historical data, that future events will probably
continue to follow past trends.
• This is important for situations where there is little current

knowledge on which to base predictions or where risks are
being considered in the longer term future.
• This strength however has an associated weakness which is

that where there is high uncertainty some of the scenarios
may be unrealistic.
Strengths and limitations
• The main difficulties in using scenario analysis are associated
with the availability of data, and the ability of the analysts
and decision makers to be able to develop realistic scenarios
that are amenable to probing of possible outcomes.
• The dangers of using scenario analysis as a decision-making

tool are that the scenarios used may not have an adequate
foundation; that data may be speculative; and that
unrealistic results may not be recognized as such.


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Climate Change & Risk Management

Prepared by Dr. Mohamed Lashin

• Ph.D. Total Quality Management of Risk Management (IRM)

Risk Management - Climate Changes 3

• Each year there are climatic events that represent risks to

• These risks arise from ‘normal’ day-to-day, seasonal, and

Risk Management - Climate Changes 4

• Most organisations have practices and strategies in place to

• For these organisations, climate variability will continue to

Risk Management - Climate Changes 5

• However, when managing climate variability in the future,

• Climate change is likely to invalidate this assumption, with

Risk Management - Climate Changes 6

• We can expect to live and operate in a climate that is

Risk Management - Climate Changes 8

• While experience in dealing with natural climate variability

• With climate change, the timescale is longer, the affects may

Risk Management - Climate Changes 9

• As climate changes, human behaviour will need to (and will)

• Effective adaptation however, requires an awareness of the

Risk Management - Climate Changes 10

"effect of uncertainty on intended outcomes (objectives)"

• “uncertainty” is not about how things will happen, but is

• It is more about our “lack of knowledge” about how things

• Events will happen, we just don't know which, how and

Risk Management - Climate Changes 11

• Uncertainty is our ignorance.

• Uncertainty is "the state of deficiency, even partial, of

• If we replace this meaning of uncertainty in the definition of

Risk Management - Climate Changes 12

• But what about "effect"? What does this word mean?

• ISO 31000 defines effect as "a deviation from the expected -

Risk = the deviation from the expected, due to our

Risk Management - Climate Changes 13

• Coordinated activities to direct and control an organization

It is an integrated and joined up approach to managing risk

Risk Management - Climate Changes 14

• the present global climate is significantly warmer than at the

• it is likely that 1990-1999 was the warmest decade in the last

Risk Management - Climate Changes 15

• most of the observed warming in the last 50 years is

• climate change will continue for decades or even centuries

Risk Management - Climate Changes 16

• For urban planners, more frequent heatwaves may increase

Risk Management - Climate Changes 17

• For the electricity sector, an increase in the number of days

• Increased peak demands on generation and distribution

• Since investment needs are strongly driven by peak demand

Risk Management - Climate Changes 18

• For agriculture, increases in temperature and net reductions

• To the extent that these increases in drought frequency or

Risk Management - Climate Changes 19

• Climate change may also create new demands for services,

• Thus, some local governments may be faced with a reduced

Risk Management - Climate Changes 20

Risk Management - Climate Changes 21

• ISO 31000 is an international risk management standard.

Risk Management - Climate Changes 22

• ISO 31000 can be applied to the achievement of any and all

risk management principles

risk management framework

risk management process

Risk Management - Climate Changes 24

Risk Management - Climate Changes 25

Risk Management - Climate Changes 26

Risk Management - Climate Changes 27

Risk Management - Climate Changes 28