What is climate risk management?

Climate change risk refers to the negative effects caused by global climate change, which causes changes in national strategies and policies, and then affects the business development of enterprises and the formulation, implementation and realization of strategic objectives.

Climate risk management strategy refers to understanding weather and climate events from the perspective of risk, making use of the development achievements of modern risk management technology to make up for the lack of meteorological science and technology level and enhance people's ability to defend and mitigate meteorological disasters.

Climate risk management strategy:

1. The basic process of risk management: identifying, analyzing, evaluating and handling risks.

2. Means of risk management: risk control and risk transfer.

One of Climate Risk Management Strategies: Climate Risk Control

1, climate risk control mainly refers to the use of meteorological science and technology information to identify climate risks in advance and take effective measures to reduce economic losses.

2. China has the characteristics of China in climate disaster risk control, and the effect is very remarkable. Annual decision-making meteorological service plays an important role in preventing and reducing losses caused by meteorological disasters. Meteorological science and technology service is also an important way to control climate risk by means of meteorological science and technology.

The second strategy of climate risk management: insurance transfer

1. Insurance transfer refers to the transfer of climate risk to insurance companies by paying insurance premiums to insurance companies, and insurance companies reduce risks and gain benefits by using the principle of loss allocation according to the principle of large numbers through cross-industry and cross-regional policyholders, and even use reinsurance to further share risks and expand benefits.

2. Insurance is an important financial means to transfer the risk and loss of natural disasters and plays an important role in disaster relief.

The third strategy of climate risk management: the transfer of climate derivatives

1. Climate derivatives are a kind of financial derivative contracts. By flexibly agreeing on relevant weather variables and payment terms in the contract, the weather risk is divided and reorganized, and then the weather risk is transferred.

2. Risk transfer principle of climate derivatives: law of large numbers-unilateral risk transfer, risk hedging principle-two-way risk transfer.

3. Climate derivatives include types: call options, put options, hedging options and swaps.