As the devastating consequences of the climate and nature crises unfold at an accelerating rate, the landscape of risk is becoming more complex, uncertain, and threatening. While a daunting prospect, a growing movement of risk, finance and business professionals are stepping up to the challenge. This article explores the experiences of such leaders, why and how they started, how they are integrating into their work, key challenges and learnings. It concludes with takeaways and resources for leaders with the goal of catalysing more authentic, brave and collective leadership.
Agency and Professional, Fiduciary Duty
Pamela McGill
As the players with direct responsibility for the majority of planet-warming pollution and natural degradation, businesses have the greatest agency to turn things around. Many businesses are also waking up to the material risks to their own survival whether from supply-chain disruption, stranded assets, uninsured losses, litigation or loss of moral licence to operate. Risk professionals are playing a key role in understanding exposures and opportunities. They grasp that whether an organization survives or not may come down to their ability to appropriately appraise, anticipate and mitigate potential losses, which is increasingly difficult to do.
“As the climate crisis accelerates, we are seeing new impacts that have never been seen before. This is inherently unknowable and so insurance is not covering the losses. There are going to be winners and losers in this.” – MD for Climate and Sustainability, Global Professional Services Firm, U.K.
“You need to start mapping physical risks at an asset level. Without this, businesses will be ill-equipped to understand exposure and meet new regulations as they kick in. There are also so many brilliant new opportunities opening up for funding and investments beyond the conventional. So, if you don't start working on this, you'll be left behind.” – Green and Sustainable Finance and Risk Advisor, India
For leading companies, climate and nature is a board priority, elevating the visibility and strategic importance of the risk function. Here, there is a positive trend to more proactive risk management to reduce harm and increase resilience, whether through investments in renewable energy, energy and materials conservation or nature restoration, with multiple business, social and health benefits.
“We mapped out our exposures from sea level rise, excessive heat, access to services, flooding and how these layer on top of each other. With the board, we walked them through it peril by peril. My CEO is passionate and always pushing us to do more.”– Chief Climate Officer, Housing Finance Business, U.S.
That said, there is a mixed landscape in terms of readiness. Research by the Institute and Faculty of Actuaries and the University of Exeter highlights the collective blind spots in the mainstream financial models used by most institutions that obscure true threat levels. Their work estimates 80% of GDP is at risk this century. Simply put, they say the global economy as we know it cannot survive the chaos of climate and nature breakdown, but this is still not widely understood or factored into decision making.
“We are moving into a new century in which the climate itself is changing and the economy is changing. If you don’t have the tools to understand the risks, you can’t navigate that future. Companies that do so well and wisely will have a competitive advantage.” – Head of Transition Advisory, Global Insurance and Reinsurance Broker, U.K.
“Risk professionals are clever, analytical, sensible people, but the way they have been taught is classical, linear, reductive and backwards looking. There is a collective blind spot in recognizing that the future will look very different to the past. There is still a relatively small proportion that ‘get it’.” – Head of Organizational Risk, Global Savings and Investments Business, U.K.
Realization and Discovery of Personal Purpose
Listening to the stories of leading professionals, there is a striking, enduring conviction that guides their work and their why. For some, this started decades ago, for others more recently. Leaders speak with passion and potency about the human cost of the climate crisis and especially its unequal consequences and causes.
“The earth will survive; humanity will not. For people born in the 2000s, what kind of world are we creating for them? It is women and the poor who are on the front line now. They have no safety net so one bad harvest is enough to threaten their survival. How will they cope?” – Green and Sustainable Finance and Risk Advisor, India
“For me this work started decades ago. I was shaped by what I saw in the world: extreme poverty in Pakistan, one of the top three nations worst hit by climate change. Even in the U.K., or, take Bangladesh, they have been suffering from this for 30 years already.” – Governance, Policy and Impact Advisor, Canada
Leaders who started more recently describe a moment or a series of moments where they became aware that things were much worse than they initially realized. This was followed by a period of intense learning, questioning and growing concern. They describe sleepless nights and feeling overwhelmed, confused, isolated, guilty and even despair. This often happened behind closed doors and in stark contrast to the daily realities of busy, professional life.
“I went through two grief cycles and I've come out resolved. This is the thing I must spend my life doing.” – Head of Organizational Risk, Global Savings and Investments Business, U.K.
These experiences align with the work of renowned climate psychologist, Renée Lertzman, who describes the tangle of emotions that typically arise when confronted with the reality of the climate crisis, from deep anxiety and ambivalence to powerful aspiration to contribute to a healthier and safer future.
“I felt like I’d been dropped into a dark tunnel with no tools to get out … yet expected to get on with my everyday life as if things were normal. But once you are exposed to that kind of information, things are not normal anymore.” – Renée Lertzman, Founder of Project Inside Out
Key Challenges and Strategies for Leaders
1. Resilience, health and determination to keep going
Leaders described the difficult reality of their work especially with mounting harms and in the face of ongoing campaigns to seed misinformation, doubt and delay and well-funded corporate lobbying acting to protect vested interests. It is hard to keep going, but they are committed to doing all that they can. Connecting to the stakes appears to be an essential element in maintaining the conviction and courage to keep going, even when the outcome seems bleak and uncertain.
“It is very hard sometimes to keep doing it when it feels no-one is listening. There is so much misinformation; even in my kids’ school, the curriculum has been greenwashed by local natural gas utilities. It is insidious.” – Governance, Policy and Impact Advisor, Canada
“It’s so easy to get bogged down by day-to-day activities, we need to keep in mind the urgency and systemic changes these combined issues demand.” – Chief Sustainability Officer, Global Real Estate Investment Manager, U.K.
Leaders noted there are few spaces in the corporate world where the scale of destruction to life and livelihoods and the immense emotional magnitude is openly acknowledged. This lack of acknowledgement can intensify feelings of hopelessness, isolation and alarm, further re-enforcing a tendency to mask such feelings. This aligns with recent research published in the Lancet, which notes that growing eco-anxiety results from the magnitude of climate breakdown alongside a perceived inadequate acknowledgement and action.
“In financial services, we teach people technical competency but we don't acknowledge the crippling emotional impact for people. It can feel like living in a parallel universe.” – Chief Risk Officer, Global Financial Services Business, U.K.
Leaders steeped in this work emphasise the importance of finding nourishment, joy and support from a trusted circle. This serves to reduce feelings of isolation, enables mutual sharing and offers a microcosm for creative ideation. This aligns with the powerful technique of ‘name it to tame it’ described by Dr Dan Siegel, that is, by acknowledging difficult feelings we reduce their impact. When we attend to feelings, we calm our defences and increase our capacity to respond. Whereas, when we deny or attempt to block the pain, when we ask ourselves or others to ‘be more positive’, we make it worse, risking physical repercussions, detachment or succumbing to the soothing allure of false solutions.
“True resilience does not come from ignoring difficult feelings, but from acknowledging and working through them. Only by facing emotions such as eco-anxiety, grief and loss can we find ways to adapt psychologically, build resilience and engage in meaningful climate action.” – Steffi Bednarek, Climate Psychologist
2. Influencing in a business-as-usual context
Leaders noted the challenge of influencing colleagues with different levels of awareness and attention. Conscious change-makers with disproportionate knowledge and concern, typically in the minority in their organizations, face the unenviable burden of attempting to convince an unconscious, distracted majority. Such minority voices are easily ignored, criticized or over-ruled by dominant prevailing beliefs. This is exacerbated by sheer stress, overwork and lack of capacity in most organizations. Again, leaders report the importance of finding solace in community.
“I have cared about this for a long time. Those of us who are aware are very worried. Others don’t know what they don’t know.” – Chief Climate Officer, Housing Finance Business, U.S.
“For most financial services professionals, this is a new topic. Something else, on top of an already full plate at home and at work. Now there is nature and biodiversity-based risk, which feels like more piled on top. There is a wide range across institutions, some are very early on and know very little.” – Green and Sustainable Finance and Risk Advisor, India
This aligns well with my experience as a leadership coach. For most business leaders I encounter, the climate crisis is not a salient priority or something they are actively grappling with. Rather, they are focused elsewhere, engrossed in more immediate, albeit related, stressors and struggles relating to health, overwork and performance pressures. There is still a deafening, problematic silence on climate.
3. Authentic, effective communication and engaging people
A key challenge for leaders is to authentically and effectively communicate and engage people. The sheer complexity of technical language, acronyms, legalese and reporting burden creates confusion and barriers to engagement. There is a struggle between all that leaders know and fear and the risk of overwhelming or disengaging people. This further contributes to hesitation, silence or a lack of candor.
“I struggle with how to talk about this stuff. The scale of the issues are so overwhelming and incalculable to most people that their automatic response is to disengage.” – Strategy, Advocacy and Risk Advisor, U.K.
“We have to focus on hope and action and try to keep people engaged. It is very difficult and I don’t always share my resignation to the harm that is coming.” – Governance, Policy and Impact Advisor, Canada
Leaders need to keep developing their capability to communicate in a way that is honest, clear and effective. People take cues from leadership, noticing what they give time to, how they behave and how they respond to others’ concerns.
In the wise words of Brené Brown: “What a leader does not bring in the room is not allowed into the room.” There is a tightrope that leaders must walk that acknowledges reality while creating the conditions for empowerment and meaningful contribution. Here, a key concept that may help is the Stockdale paradox:
“You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.” – Admiral James Stockdale
This powerful idea, popularized by Jim Collins, was coined by Stockdale following eight torturous years in the infamous ‘Hanoi Hilton’ prisoner-of-war camp. He described how some inmates succumbed to death through false optimism. Their inability to face reality meant they set themselves up for bitter disappointment. Others gave up all hope of survival thereby sealing their fates through deterministic pessimism. Both are pitfalls that play out in response to the climate and nature crises. Leaders who convey false hope or deny reality make bad decisions and lose credibility, whereas those who transmit doom, kill morale and contribute to inertia.
Business leaders have the opportunity and obligation to break the cycle of silence and create the conditions for honest reflection, connection and meaningful contribution. This is a powerful motivator and likely to be essential to attract, retain and engage talent now and in the future. Recent surveys in the U.K. and U.S. point to growing concerns among employees who are willing to quit their jobs over weak climate action. This trend is only set to intensify among younger generations, as 75% of 16- to 25-year-olds report feeling that their future is frightening. Most people want their work to matter, especially during this decisive decade for humanity. Leaders describe the powerful engagement and discretionary effort that has been unleashed when they engage people appropriately in this work:
“When we started to bring people together on this we found they cared so much. We found incredible latent talent that was sitting dormant. There was a spark and so much passion”. – Chief Climate Officer, Housing Finance Business, U.S.
Three Key Takeaways For Leaders:
So, what are the learnings and implications for readers who are interested to learn more and play their part?
1. Face it, focus and feel:
The common thread across leaders’ stories is a choice to engage. At some point, they witnessed or learned something that they could not unlearn that sparked a new trajectory for their lives and work. The first step, therefore, is to choose to attend to it by slowing down, making space and facing it.
“The times are urgent, we must slow down.” – Báyò Akómoláfé, Professor of Psychology
To lead and respond appropriately, we need to know where we are and what is going on. This takes time, energy and attention. For many, it demands an escape from the maelstrom of busy-ness and daily grind. It requires learning, unlearning and a reassessment of what we think we know. We need to understand the harms that have already taken place, the risks that are baked in and the uncertainty of unpredictable, non-linear and irreversible tipping points.
We need to understand, not only the climate science, but the root causes and entanglements with business and economic growth, physical infrastructure, vested interests, structures of power, inequality, over-consumption and ecological overshoot. While this is far from easy or comfortable, there is a common sentiment of “I wish I’d known and started sooner” among those who are doing this vital work. We need to do this gently and kindly, with community and compassion.
For readers keen to learn more, the following resources are recommended:
- The State of the Climate Report in October 2024 provides a stark warning grounded in the latest peer-reviewed research. It highlights that we are entering a “perilous, critical and unpredictable new phase”, “on the brink of an irreversible climate disaster” and despite efforts to date “we are still moving in the wrong direction” with the root cause of fossil fuel pollution “at an all-time high”.
- Most people I know, published in April 2024, is a candid, accessible, big picture synthesis of the interconnected climate, nature, health and economic crises, where we are, key forces that block progress and implications for the future.
- GARP’s Sustainability and Climate Risk (SCR®) Certificate offers a pivotal, comprehensive and up-to-date program designed for risk, finance and business decision-makers.
2. Speak up, share and support:
Leaders highlight the importance of speaking up and seeking support as an essential source of resilience and learning. The simple act of sharing concerns acts as a powerful antidote to inaction since we take our cues from each other. The more we bury concerns and carry on as normal, the more we perpetuate delay, denial and inadequate action. In contrast, when we speak up, we encourage others and find communities of support and creativity.
The following resources are recommended:
- Leaders everywhere will benefit from this short video from climate communications expert, John Marshall, on how to communicate effectively about climate change.
- Project Inside Out provides resources for leaders and change-makers, grounded in psychology and social science.
- Various communities of support including the good grief network, climate cafes and the work that reconnects.
3. Show up, step up and put your strengths to work:
Professor Jim Skea, Chair of the Intergovernmental Panel on Climate Change, in August 2024, warned that nothing short of a ‘heroic effort’ is required to avoid the most devastating and irreversible impacts of climate change. But heroic effort does not imply a call for heroic leadership, rather, we need more humble, honest and human leaders that bring people together and harness a melting pot of strengths.
Among such leaders, we need more risk, finance and business professionals. As trusted stewards of long-term organizational health known for dispassionate analysis, they are uniquely placed to articulate the threats and opportunities. When the stakes are understood, professional duty, personal values and rational self-interest, converge powerfully into a commercial imperative for bold, ambitious action, opening up unexpected possibilities.
The following inspirational examples and resources are recommended:
- Investments by industrial corporates in nature conservation, unlikely cross-industry partnerships calling for science-led regulation and banks calling for a post-growth transition.
- Exponential growth of renewables and clean technology: Renewables 2023 by the IEA, Bloomberg’s 2024 New Energy Outlook and RMI’s Cleantech Revolution.
- The book, ‘Who do we chose to be? Facing Reality, Claiming Leadership, Restoring Sanity’, by Margaret Wheatley.
Parting Thoughts
Living and leading during such times is a monumental challenge and a profound, unifying call to service for people everywhere. It demands a new kind of leadership commensurate with the unprecedented scale of loss. It is inspiring to witness the growing movement of risk, finance and business leaders stepping up to the plate, and hopeful to consider the latent talent yet to be unleashed.
Pamela McGill is a leadership coach with an unusual background in psychology and physics. She is the founder of RE Leadership, an independent impact firm on a mission to unleash REAL leadership as a force for good. Her work enables strong individual leadership, high performing teams and cohesive cultures that inspire, energise and create the conditions for meaningful contribution.
