COVID-19, the climate crisis, and public polarization

COVID-19, the climate crisis, and public polarization | Insurance Business Asia

COVID-19, the climate crisis, and public polarization

Polarization on many issues has grown globally in the recent years. Even public health measures, such as masks and vaccines, have become points of contention due to the COVID-19 pandemic. And, of course, the climate crisis, which has huge implications on all human life, remains an ever-present turmoil.

“The past 18 months have seen an explosion of new scientific and public health knowledge and a highly polarized public debate as people engage with rapid medical progress and huge amounts of novel data,” said Stephen Sidebottom (pictured above), chair of the Institute of Risk Management (IRM). “As new insights and information have emerged, people have used them to promote very varied ideas, responses, and forecasts – offering sometimes radically differing views which have occasionally boiled over into protest, threats and violence.”

Risk managers could run into problems operating in such a polarized atmosphere, driven by social media and the proliferation of fake news. A company-wide COVID vaccine mandate will most likely receive pushback from vaccine-hesitant employees, while some business leaders may not take kindly to proposals to reduce carbon emissions due to the possible costs. These conflicts, while initially small, may escalate into more severe situations, such as employee termination, work stoppages and lawsuits.

According to Sidebottom, it is not surprising that these differences of opinion provoke strong feelings in people. Instead, what’s more surprising is that when people have strongly held views or beliefs, seeing evidence to the contrary is likely to lead them to double down, or hold on to those convictions more strongly, rather than change their mind.

“This presents a practical challenge for risk leaders about how to get decision makers to engage with new data and risks that challenge the status quo that they value,” Sidebottom said, adding that individuals’ resistance to new and threatening data is rooted in how the brain works.

“Denial becomes particularly strong when one’s sense of self is at stake,” Sidebottom said. “These in-built biases affect critical decision makers in governments, organizations, and institutions in the same way as anyone else – after all, we all share the same psychological make up. When confronted with fundamental threats, our responses can range from simple denial or over-optimism to a selective focus on, for example, short time horizons, self-validating data, and various kinds of group think. Without robust and rigorous governance and risk management responses, these psychological biases can easily start to shape organizational action – or inaction.”

With both the climate crisis and the COVID-19 pandemic, many commentators have said that world leaders could have done more to prepare for these threats, but they didn’t.

“In their book The Ostrich Paradox: Why We Underprepare for Disasters, Howard Kunreuther and Bob Meyer highlight the gap between concerns about global climate change and action to address it,” Sidebottom said. “Sixty-seven percent of people around the world believe the climate crisis is a major threat, but despite this, most governments, institutions, and organizations have not yet taken the effective steps needed to address the risks arising from climate change.”

The 2021 United Nations Climate Change Conference, also known as COP26, is currently being held in Glasgow. Despite the presence of global leaders that hold a tremendous amount of decision-making power, the COP meetings have been criticized as slow and ineffectual, as the world falls behind on its goal to limit global warming to 1.5 degrees Celsius.

“Progress is slow, each of us has a part to play, and for sure we can’t leave this issue just to politicians and regulators,” Sidebottom said. “Effective action for risk managers means understanding the implications of climate science for your business and acting to create a new status quo where acting, instead of waiting to see what happens, is the default position. This means getting to a place where sustainable forward-looking climate change risk mitigation measures are built into business plans now.”

As the need to address the climate crisis becomes of utmost urgency, risk managers may want to brush up on the topic and learn how to approach the issue. To this end, the IRM published its climate change risk management framework and guidance one month before COP26. IRM also partnered with Imperial College London to design and deliver a program on climate change risk management.

“It builds on world-leading expertise in the science of climate change and a deep understanding of enterprise risk management to explore why managing climate change risk is important to organizations and how to identify, understand, and manage these mission-critical risks in a practical and immediate way,” Sidebottom said.