Understanding Business Risks

Climate Risks Are Financial Risks An alarming USD 1.14 trillion in corporate value, linked to the world's largest stock markets is exposed to severe socio-economic impacts from #climatechange by 2050. Data from the Climate Hazard and Vulnerability Index (CHVI) highlights a critical blind spot for many businesses: 📌 48 countries will be highly vulnerable to socio-economic climate impacts by mid-century, double today’s figure. 📌 Major emerging markets are expected to face significant climate-related disruptions. 📌 India alone accounts for over USD 1 trillion of the at-risk corporate assets, dramatically impacting global markets and supply chains. 🚨Companies must place dedicated climate leadership at the highest level to proactively identify risks, anticipate market disruptions, and strategically invest in long-term resilience. 🚨 Businesses should move beyond physical hazards to systematically report and manage socio-economic climate vulnerabilities. Transparent, detailed disclosures help stakeholders understand risks and encourage informed investments. 🚨 Corporates must prioritize investment in resilient infrastructure, diversified supply chains, and sustainable practices, particularly in vulnerable regions. This strategic foresight protects operational continuity and market valuation. The globalized nature of corporate operations means that climate vulnerability anywhere becomes a financial risk everywhere. 🌱 Is your company equipped with climate leadership at board level? Read more here 👇 https://lnkd.in/eFnsnjyY #ClimateRisk #ClimateLeadership #SustainableGovernance #ESG #BoardGovernance #InvestmentStrategy #Resilience #ClimateAction

I couldn’t ignore this. The recent CEO resignation at The Astronomer following the Coldplay incident is a fascinating case study in leadership accountability and boardroom dynamics. As a Chartered Administrator and PhD holder in Management Sciences, I find this situation particularly relevant, not for the gossip, but for what it reveals about the evolving responsibilities of leadership and the strategic role of governance. In today’s world, CEOs are not just business drivers; they’re brand ambassadors. Their actions whether inside the company or on a public stage carry weight. And when public perception turns negative, it’s the board that must step up and manage the fallout. Here are a few key reflections from a governance perspective: 🔹 Leadership today is 24/7: The lines between personal conduct and professional image are blurred. A moment can cost reputation sometimes irreparably. 🔹 Board independence is essential: A mature board knows how to respond with clarity and integrity, ensuring that decisions protect both the company’s values and its future. 🔹 Reputation is a board-level risk: It must be treated with the same rigour as financial, operational, or legal risks. Governance isn’t only about compliance; it’s also about conscience. 🔹 Culture, context, and communication: In a globalised setting, cultural awareness and emotional intelligence are non-negotiable traits in leadership. This isn’t about judging individuals. It’s a professional reflection on how fragile trust can be, and how vital it is for leadership and boards to act with foresight, empathy, and strategic clarity. Good governance isn’t tested when things are smooth; it’s revealed when the unexpected happens. Dr. Carine Jennings-Ferreira Ph.D

𝗜𝗻𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝘄𝗶𝗹𝗹 𝗯𝗲 𝘁𝗵𝗲 𝗳𝗶𝗿𝘀𝘁 𝘀𝘆𝘀𝘁𝗲𝗺 𝘁𝗼 𝗰𝗿𝗮𝗰𝗸 𝘂𝗻𝗱𝗲𝗿 𝗰𝗹𝗶𝗺𝗮𝘁𝗲 𝗿𝗶𝘀𝗸 — 𝗮𝗻𝗱 𝗶𝘁 𝘀𝗵𝗼𝘂𝗹𝗱 𝗰𝗼𝗻𝗰𝗲𝗿𝗻 𝘂𝘀 𝗮𝗹𝗹. Natural disasters caused $𝟯𝟲𝟴 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 in global economic losses last year, according to Aon — the ninth year in a row losses topped $300 billion. Only 𝟰𝟬% of those losses were insured. The protection gap is widening. As insurers retreat from high-risk regions, public safety nets — often overstretched — are stepping in. More households, businesses, and governments are being left to absorb risks they cannot afford. This isn’t just about insurance anymore. When insurance breaks down, so does credit. When credit dries up, property values fall, costs rise, and resilience weakens — just when it’s needed most. @Günther Thallinger 𝗳𝗿𝗼𝗺 𝗔𝗹𝗹𝗶𝗮𝗻𝘇 put it starkly: “𝘛𝘩𝘦𝘳𝘦 𝘪𝘴 𝘯𝘰 𝘤𝘢𝘱𝘪𝘵𝘢𝘭𝘪𝘴𝘮 𝘸𝘪𝘵𝘩𝘰𝘶𝘵 𝘧𝘶𝘯𝘤𝘵𝘪𝘰𝘯𝘪𝘯𝘨 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘴𝘦𝘳𝘷𝘪𝘤𝘦𝘴. 𝘈𝘯𝘥 𝘵𝘩𝘦𝘳𝘦 𝘢𝘳𝘦 𝘯𝘰 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘴𝘦𝘳𝘷𝘪𝘤𝘦𝘴 𝘸𝘪𝘵𝘩𝘰𝘶𝘵 𝘵𝘩𝘦 𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘵𝘰 𝘱𝘳𝘪𝘤𝘦 𝘢𝘯𝘥 𝘮𝘢𝘯𝘢𝘨𝘦 𝘤𝘭𝘪𝘮𝘢𝘵𝘦 𝘳𝘪𝘴𝘬.” The Institute and Faculty of Actuaries (IFoA) project a 𝟱𝟬% 𝗰𝗼𝗹𝗹𝗮𝗽𝘀𝗲 𝗶𝗻 𝗴𝗹𝗼𝗯𝗮𝗹 𝗚𝗗𝗣 𝘄𝗶𝘁𝗵𝗶𝗻 𝗱𝗲𝗰𝗮𝗱𝗲𝘀 if climate risk is not properly managed. Climate risk is no longer a future scenario. It is here. It is compounding. And it is reshaping our economy in real time. There are positive signs: ➤ Hannover Re and Swiss Re are restricting fossil fuel underwriting. ➤ Parametric insurance models are speeding up disaster recovery. ➤ EIOPA and the European Central Bank are pushing for public-private risk sharing. These are encouraging — but early signs. 𝗠𝘆 𝘁𝗮𝗸𝗲: Climate risk is already disrupting the systems we rely on: insurance, credit, asset valuation, and public finances. Systems change is needed. The insurance sector holds a unique vantage point — but leadership now demands rethinking long-held assumptions about risk, resilience, and responsibility. The sector has an opportunity to lead: ➤ Embed forward-looking climate risk into underwriting ➤ Signal future exposures more transparently ➤ Drive transition finance to accelerate decarbonisation ➤ Redirect investment into adaptation ➤ Co-design shared risk pools and resilience bonds Collaboration between insurers, financiers, and governments is no longer optional — it is the foundation for economic stability in a climate-disrupted world. The sooner we align risk pricing with physical reality, the stronger our chances of building a more resilient economy for the future. #climaterisk #insurance #resilience #finance #sustainability #systemicrisk #adaptation –––––––––– For updates on sustainability, climate, and innovation, follow me on LinkedIn: @Scott Kelly

Attackers don't need to exploit your infrastructure anymore. They just need to impersonate the trusted agents. The diagram below caught my attention. It has a clean architecture including the agent for AI driven software delivery with requirements, dev, testing, audit, deployment, and monitoring. It is automated, scalable, and efficient. Let’s focus on the so called 'security audit agents'. In this model, they sit at the gate reviewing code, signing off on what’s safe, and passing it to deployment. But there’s a fatal assumption baked in: every agent is trusted by default. That’s where this attack comes in. It can inject dozens of fake agents into the process, so, there's no exploit, no 0day, and just identity fraud at scale. These 'agents' approve of whatever payload I choose, backdoors, data exfiltration logic, or supply chain implants. The rest of the pipeline? It doesn’t question a thing. Deployment ships it. Monitoring observes it, and no one ever asks, “Who are these agents, and why should we trust them?” What are the potential recommendations? Multi Agent with Trust: If using multi agent orchestration requires cross validated approval from agents in separate trust zones to mitigate Sybil voting on harmful payloads Role scoped agent: Don’t give every agent complete access to sensitive model actions. Scope agent capabilities via RBAC or dynamic policy evaluation Trust boundaries: Only allow fine-tuning from curated, signed datasets. Use dataset attestation to prevent data poisoning or stealth injection of malicious behavior by fake contributors. So, this is the future of software supply chain attacks. Image credit, Shuai Guo, PhD. #security #cybersecurity

Business Risks from Climate Change 🌎 Businesses today face increasing exposure to climate-related risks that can disrupt operations, damage assets, and impact long-term viability. These risks are no longer hypothetical—they are material, measurable, and growing in relevance across all sectors. According to the TCFD, climate risks fall into two main categories: physical risks and transition risks. Physical risks include both acute events, such as storms and floods, and chronic impacts like water scarcity or rising temperatures. Transition risks emerge from the shift to a low-carbon economy and include regulatory changes, shifts in market demand, and pressure to invest in new technologies. Extreme weather events, supply chain interruptions, and damage to infrastructure are some of the key physical risks. These can lead to increased operational costs, reduced productivity, and disruptions in raw material availability. Transition risks are equally important. Carbon pricing, energy cost volatility, and investor scrutiny are reshaping business models. Companies that delay adaptation may face stranded assets, higher insurance costs, and reduced access to capital. Addressing these risks requires more than isolated sustainability initiatives. It demands integration into core business strategy, risk management, and investment planning. Short-term actions can have long-term implications. Clear priorities include assessing exposure, upgrading infrastructure for resilience, and embedding climate risk into existing governance and risk processes. These actions support both operational continuity and regulatory preparedness. Developing low-carbon strategies and enhancing disclosure practices aligned with standards like the TCFD are also essential steps. Transparent reporting builds trust with investors, regulators, and other stakeholders. Climate risk is business risk. Managing it effectively is no longer optional—it is fundamental to long-term value creation and competitiveness. #sustainability #sustainable #business #esg #climatechange #risks

When in Doubt, Just Delete It? Corporate Climate Silence is Getting Louder 🌍🚨 According to a recent Financial Times investigation by Attracta Mooney and Susannah Savage, major U.S. corporations are quietly erasing climate commitments from public view. The report reveals that companies like Walmart, KraftHeinz, Meta, Ford Motor Company, and American Airlines have scrubbed or softened references to climate change from their websites. In some cases, bold pledges—like cutting emissions by 50% by 2030—have disappeared entirely. This isn’t happening in a vacuum. With political attacks on environmental policies intensifying, many companies are opting for "greenhushing"—downplaying or omitting sustainability efforts to avoid controversy. But of course, this makes perfect sense. After all, the election of Donald Trump has fundamentally altered the science of climate change and carbon emissions, right? Surely, CO₂ molecules now behave differently depending on who occupies the White House. 🤔🌱💨 (Okay, sarcasm over.) Here’s the real issue: erasing climate commitments doesn’t erase climate risks. 🔹 Investors are watching. The push for transparency in ESG reporting isn’t just about optics—it’s about long-term financial stability. Weakening climate targets today could mean increased regulatory scrutiny, shareholder activism, or even capital flight tomorrow. 🔹 Customers care. Greenwashing is bad. But greenhushing? It sends the message that a company’s commitment to sustainability is only as strong as the political winds allow. That’s a fast way to lose trust. 🔹 Employees are paying attention. Younger talent, in particular, prioritises sustainability. A quiet retreat on climate commitments could hurt not just a company’s brand, but also its ability to attract and retain top talent. Beyond the immediate reputational risks, this entire approach is staggeringly shortsighted. Climate change isn’t a PR issue—it’s a physical reality that will disrupt supply chains, displace populations, and drive economic instability. Pretending otherwise doesn’t change the science, it only delays the inevitable reckoning. And at its core, this is deeply disappointing. Corporate leadership isn’t just retreating from climate action; it’s demonstrating a complete moral failure. If a company’s sustainability strategy evaporates the moment political pressure rises, was it ever real in the first place? 🌎💔 What do you think? Are we entering an era where businesses retreat on sustainability—not just in words, but in actions too? 🔗 Full article here: https://lnkd.in/egngPgqw #ClimateRisk #ESG #CorporateResponsibility #Greenhushing #Sustainability

As summer heatwaves intensify, so do the economic risks 🔥 Our latest analysis finds that the recent heatwave could cost Europe up to -0.5pp of GDP. Estimated losses range from -0.1pp in Germany to -1.4pp in Spain, with -0.6pp for the US and -1.0pp for China. The rising frequency of extreme weather isn’t just an environmental issue—it’s an economic one. To put this in perspective: one day of extreme heat (above 32°C) is roughly equivalent to half a day of strikes in terms of economic disruption. 📉 While heatwaves temporarily disrupt manufacturing and services, partial catch-up effects are likely as conditions normalize. However, losses in agriculture and infrastructure tend to be more persistent. 🔧 Adaptation is key In the short term, early warning systems and prevention measures can reduce impact. But these must be paired with longer-term structural solutions: • Urban greening to cool cities • Climate-proof infrastructure • Adjusted working hours and building standards #GDPImpact #ClimateAdaptation #Macroeconomy #UrbanGreening #ResiliencePlanning #ClimateRisk #Ludonomics #AllianzTrade #Allianz

What are the key trends shaping the insurance industry today? EY explores these dynamics in a 25-page report, structured into three key sections. It begins with an overview of the political, economic, and regulatory landscape, outlining the external challenges insurers should anticipate in the coming months. The report also highlights how these factors may evolve differently in the US and Europe. It then examines market opportunities across different business lines, highlighting "emerging risks" that incumbents must address while warning of a widening protection gap. The report outlines why these challenges also present opportunities, encouraging insurers to explore new operating models—such as parametric insurance—enhance risk transfer capabilities, and leverage increased personalization. Finally, my favorite section focuses on the key technology trends insurers should incorporate into their roadmaps. Unsurprisingly, artificial intelligence takes center stage, with the report offering insights into how both executives and employees anticipate its impact on operations. Interestingly, perspectives on AI remain mixed (see page 22). Beyond AI, the report highlights the broader data challenge, emphasizing how technological initiatives should enhance insurers' ability to leverage existing data more effectively while exploring new data sources. #insurance #insurtech #venturecapital

India’s Largest Aviation Insurance Payout? Rs 4,080 Crore Air India Crash Fallout That Will Reshape Indian Skies On June 12, 2025, Air India Flight AI171, a Boeing 787-8 Dreamliner, crashed near Ahmedabad. 241 lives were lost on board. 38 more on the ground. A Rs 4,080 crore insurance claim. This isn’t just a tragedy. It’s a turning point for Indian aviation, insurance, and regulation. This is India’s deadliest crash in over a decade. Breakdown of the Insurance Bombshell: 1️⃣ Component Estimated Cost: Aircraft (hull + engine) Rs 1,075 crore 2️⃣ Liability (passenger + third-party) Rs 3,014 crore 3️⃣ Total Rs 4,080 crore. That’s 3x India’s total aviation insurance premium in 2023. 5 Industries, One Shockwave 1️⃣ Aviation Insurance: This claim will drain global reinsurers and jack up premiums across Indian airlines. Expect tougher terms, higher deductibles, and a cold re-rating of India’s aviation risk. 2️⃣ Aviation Sector: Every airline will be under the microscope, with maintenance logs, pilot hours, and fleet age. Expect regulators to get aggressive. 3️⃣ Aircraft OEMs: Even though mechanical failure isn't confirmed, scrutiny on the 787-8 Dreamliner just spiked. If grounded, it disrupts fleets globally. 4️⃣ Crisis Infrastructure: Ground handlers, airports, emergency response units, everyone’s getting audited. This crash exposed just how unprepared most hubs still are. 5️⃣ Tata Group: While Tatas acted fast, offering Rs 1 crore interim relief and public condolences. This dents the Group’s post-privatisation turnaround story. Systemic Gaps Laid Bare - Each passenger’s family is eligible for Rs 1.5–1.8 crore. India’s systems aren’t built for such rapid-scale payouts. - 95% of the aviation risk is reinsured abroad. Time to ask: Where is India’s risk appetite? - Safety audits often remain paperwork exercises. Post-crash, expect an overhaul or at least headlines demanding one. Unexplored Raj Perspectives - This Rs 4,080 crore payout will be felt from Lloyd’s to Singapore. Expect reinsurers to tighten terms for wide-body aircraft in emerging markets. -If even a temporary 787-8 grounding happens, Air India’s London routes and global schedules are in jeopardy. - This tragedy pushed India’s insurers to stop outsourcing risk and build real aviation underwriting capabilities. - Insurance renewals will be brutal. Some smaller carriers may not survive the new cost structure. - Marginal airlines will either fold or merge. The cost of compliance is rising. India’s civil aviation growth story, until now seen as bullish, will face tough global scrutiny. Air India Flight AI171 crash is a defining moment for Indian aviation. It’s a brutal reminder: You can’t fly into the future on fumes, patches, and hope. If India wants to scale its aviation dreams, it must match ambition with accountability. Stronger safety nets. Smarter insurance frameworks. Let this be the last time a tragedy is the cost of reform. #india #aviation #insurance #people