Business Risk Management

Globalisation, climate change, the global economic crisis, and the increasing political instability have multiplied the risk factors faced by firms. Climate change, in particular the variability of weather, heavily affects decision-making. Indeed, many firms belong to highly weather-sensitive economic sectors, but, at the same time, they have a key role to play in dealing with the challenges of climate change. For their own survival, such firms should adopt actions aimed at promoting a risk reduction through urgent measures designed to combat climate change (reduction of energy consumption, switching to renewable energy sources, etc.). On the other hand, they should enable complementary interventions to share weather risks. Such a sharing could be obtained in many ways. As an example of sharing of weather risks, firms could buy derivative contracts that are designed to protect firms from weather events (excess/lack of rainfall, wind, temperature, snow, etc.). Another example, in the case of tourist firms, is the empowerment of “accessory services”, such as tasting events, sport activities, wellness centers, which promote tourism attractiveness safeguarding territory sustainability. The group focuses its research on a wide range of ways to reduce and/or share business risks arising from climate change, with a particular regard on the variability of weather: from a literature review of the topic, to the advancement of models designed to encourage effectiveness and efficiency in the management of business risks, accompanied by empirical applications on publicly available data.