Managing Climate Change Risks in Critical Infrastructure Protection with Examples from the European Financial Sector

Extreme weather events fostered by climate change jeopardise the smooth operation of critical infrastructures and thus threaten the availability of essential services, including financial services. As these extreme events are predicted to become more frequent, the proper management of natural hazards is essential in critical infrastructure protection. This paper first describes the risk management of natural hazards. Then examines the European financial sector approaches the issue of climate change and natural hazards in general, based on publicly available sector-specific data. It will then give an overview of the preparedness of some European banks, based on our survey. In the end it attempts to identify areas for further improvement. Although the focus has been put on the members of the European banking industry, the results and conclusions may be applicable in other sectors as well. Moreover, the findings and best practices may be of service to auditors, legislators and researchers.