Developing Risk Management Approaches for Climate Risk

Loss and damage from natural disasters have increased substantially over the last couple of decades. In 2020, for example, 980 natural disasters struck the world, causing significant economic loss, destroying major infrastructure, and claiming human lives. A single natural disaster can have enormous financial impacts. Some of these damages and losses can be reduced and transferred if appropriate policies and actions are applied. For this reason, Climate and Disaster Risk Management (DRM) has gained importance on international agendas and in many organisations. The main idea behind DRM is to focus on managing the risks that turn hazards into disasters.

The Integrated Disaster Risk Management (IDRM) approach is a further developed and refined version of the traditional DRM approach. The IDRM approach includes the “Retention and Transfer” phase, which employs financial instruments like insurance to allow funds to be mobilised quickly after a disaster occurs.
Furthermore, the IDRM approach offers a holistic conceptual framework to address various dimensions associated with risk emergence, risk management, and the manifestation of disasters. It is a risk-oriented guide, which incorporates climate change adaptation measures into disaster risk management policies and plans for sustainable development.

This short guide illustrates the methodology and the steps for a correct IDRM approach.