Climate & Operational Risk: The ORX approach
- 20 July 2022
About the paper
Climate is a major focus for risk managers across the globe. Given both the environmental changes we are witnessing, and the understandable regulatory focus and societal response, organisations have been grappling with how to integrate climate into their risk management approach.
As a result of discussions with members, ORX is intending to help with this challenge during 2022 (and beyond).
What are we doing to support members and subscribers?
This paper sets out how we currently believe the industry is considering climate and operational risk, as well as how we will enhance our existing data and services to support members. This will include:
- ORX Reference Taxonomy: Providing guidance on applying event, cause and impact taxonomies on climate risk-related events.
- ORX Global & Insurance Loss Data: Using a climate flag to allow members to begin to share climate-related operational risk loss events.
- ORX Scenarios: Publishing a paper on current scenario practices for climate, developing a climate-related scenario handbook, and using a climate flag/drivers in the scenario library to support sharing of relevant data.
- ORX News: A climate flag added to highlight relevant external event stories.
- Stress Testing: Activity to support members’ participation in relevant regulatory stress tests.
In addition, this paper outlines examples of how the ORX Reference Taxonomy can be used to capture climate-related operational risks.
More on this topic from ORX
The latest episode of the ORX Operational Risk Podcast includes a discussion of the ORX approach to climate risk, plus examples of relevant publicly-reported events from ORX News. You can listen to the podcast on Apple Podcasts, Spotify or anywhere else you get your podcasts from. You can also listen online.