CLIMATE CHANGE AS THE NEWEST DETERMINANT OF CORPORATE RISK MANAGEMENT STRATEGIES OF MULTINATIONAL ENTERPRISES

Mykhailo Rushkovskyi () and Dmytro Rasshyvalov ()
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Mykhailo Rushkovskyi: Institute of International Relations of Taras Shevchenko National University of Kyiv, Ukraine
Dmytro Rasshyvalov: Institute of International Relations of Taras Shevchenko National University of Kyiv, Ukraine

Green, Blue & Digital Economy Journal, 2021, vol. 2, issue 3

Abstract: This article aims to summarize and present the fundamental trends of the last decade related to climate change, as well as interstate and global economic cam-paigns to slow it down, which create a powerful new determinant for multina-tional enterprises (MNEs) in corporate governance, risk management and the sound management of climate risks and opportunities. Methodology. The analy-sis is based on recent studies by leading international scientists such as the Inter-national Energy Agency and the Economist Intelligence Unit, authorized UN bod-ies, universities, and the MNE Task Force on Climate-related Financial Disclo-sures. The results of the analysis showed that climate risks and opportunities al-ready have a clear monetary value and impact on MNE. Today's efficient busi-ness faces the need to build an effective system for managing such risks, which, in addition to its direct effect on MNE, will also be an important signal to stake-holders, which, in turn, can reduce the cost of capital raised and increase reve-nues level. Practical implications. For some EU countries, it will soon become mandatory to highlight climate risk management principles and approaches in annual reports. Internal models are being developed to show the impact of cli-mate change on the business of MNEs (e.g. an increase of 1.5 °C, 2 °C, 4 °C in total temperature). A unified approach to climate risk management is therefore becoming a topic of great importance to MNEs and their stakeholders, including regulators, investors, shareholders, and society. Value/originality. The analysis provides an in-depth understanding of the main factors of climate-risk manage-ment for MNEs, as well as its practical implications arising in the global economy.

Keywords: risk management strategies; climate change; risk management (search for similar items in EconPapers)
JEL-codes: D81 G32 Q54 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:bal:gbadej:2661-5169:2021:2:3:7

DOI: 10.30525/2661-5169/2021-3-7

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