CLIMATE CHANGE AS THE NEWEST DETERMINANT OF CORPORATE RISK MANAGEMENT STRATEGIES OF MULTINATIONAL ENTERPRISES

##plugins.themes.bootstrap3.article.main##

##plugins.themes.bootstrap3.article.sidebar##

  Mykhailo Rushkovskyi

  Dmytro Rasshyvalov

Abstract

This article aims to summarize and present the fundamental trends of the last decade related to climate change, as well as interstate and global economic cam-paigns to slow it down, which create a powerful new determinant for multina-tional enterprises (MNEs) in corporate governance, risk management and the sound management of climate risks and opportunities. Methodology. The analy-sis is based on recent studies by leading international scientists such as the Inter-national Energy Agency and the Economist Intelligence Unit, authorized UN bod-ies, universities, and the MNE Task Force on Climate-related Financial Disclo-sures. The results of the analysis showed that climate risks and opportunities al-ready have a clear monetary value and impact on MNE. Today's efficient busi-ness faces the need to build an effective system for managing such risks, which, in addition to its direct effect on MNE, will also be an important signal to stake-holders, which, in turn, can reduce the cost of capital raised and increase reve-nues level. Practical implications. For some EU countries, it will soon become mandatory to highlight climate risk management principles and approaches in annual reports. Internal models are being developed to show the impact of cli-mate change on the business of MNEs (e.g. an increase of 1.5 °C, 2 °C, 4 °C in total temperature). A unified approach to climate risk management is therefore becoming a topic of great importance to MNEs and their stakeholders, including regulators, investors, shareholders, and society. Value/originality. The analysis provides an in-depth understanding of the main factors of climate-risk manage-ment for MNEs, as well as its practical implications arising in the global econo-my.

How to Cite

Rushkovskyi, M., & Rasshyvalov, D. (2021). CLIMATE CHANGE AS THE NEWEST DETERMINANT OF CORPORATE RISK MANAGEMENT STRATEGIES OF MULTINATIONAL ENTERPRISES. Green, Blue & Digital Economy Journal, 2(3), 43-48. https://doi.org/10.30525/2661-5169/2021-3-7
Article views: 88 | PDF Downloads: 76

##plugins.themes.bootstrap3.article.details##

Keywords

risk management strategies, climate change, risk management

References

The Economist Intelligence Unit (2015). The Cost of Inaction: Recognizing the Value at Risk from Climate Change. Available at: https://impact.economist.com/perspectives/sites/default/files/The%20cost%20of%20inaction_0.pdf

United Nations Framework Convention on Climate Change (2016). The Paris Agreement. Available at: https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement

International Energy Agency (2015). Energy Climate and Change. World Energy Outlook Special Briefing for COP21. Available at: http://climateknowledge.org/figures/Rood_Climate_Change_AOSS480_Documents/IEA_COP21_Paris_Briefing_IntEnerAgen_2015.pdf

Task Force on Climate-related Financial Disclosures (2017). Recommenda-tions of the Task Force on Climate-related Financial Disclosures. Available at: https://assets.bbhub.io/company/sites/60/2021/10/FINAL-2017-TCFD-Report.pdf

Law360 (2016). Emerging Trends In Climate Change Litigation. Available at: https://www.law360.com/articles/766214/emerging-trends-in-climate-change-litigation

Copenhagen Centre on Energy Efficiency, UNEP DTU Partnership (2016). Best Practices and Case Studies for Industrial Energy Efficiency Improvement. Available at: https://europa.eu/capacity4dev/unep/documents/best-practices-and-case-studies-industrial-energy-efficiency-improvement

Environmental Protection Agency Victoria (EPA Victoria) (2020). How to improve resource efficiency in your business. Available at: https://www.epa.vic.gov.au/for-business/how-to/lower-environmental-impact-business/improve-resource-efficiency-business

International Energy Agency (2016). Global energy investment down 8% in 2015 with flows signaling move towards cleaner energy. Available at: https://www.iea.org/news/global-energy-investment-down-8-in-2015-with-flows-signalling-move-towards-cleaner-energy