How to protect people and prosperity: European roundtable on managing climate risks

June to August 2024 was the warmest summer on record, exceeding the previous record set in 2023, and Europe faced multiple climate extremes. Reducing greenhouse gas emissions remains an utmost priority, but even if we stay below 1.5°C globally, the EU is warming at twice the global average, bringing us to a physical climate reality around 3° degrees over and above pre-industrial levels already today.

The first European Climate Risk Assessment, published by the European Environmental Agency in March 2024, shows that the EU is not prepared for the coming climate hazards and urgent action is needed.

The European Roundtable on Climate Risk Management brought together high-level representatives, national and local authorities, civil society, financiers, insurers, farmers, business, research and media, to discuss the way forward for getting ahead of these climate risks and damages.

As a follow-up of the Commission Communication on managing climate risks adopted in March 2024, the roundtable also provided an opportunity for exchange ahead of the preparation of the European Climate Adaptation Plan announced in President von der Leyen’s political guidelines for 2024-29.

With lively discussions along four main themes, the roundtable recognised the gravity of the situation. It also showed that, with urgent action, we can keep Europe liveable and protect people and prosperity.

Empowering actors – improved governance and structural policies

“We are not looking at different governance for our world, but a different world that requires new governance”

Climate resilience cannot be tackled with a narrow sectoral view – it must be a central and cross-cutting priority. The scale of the changes that are coming is still not understood by most: the best-case scenario and the worst-case scenario of future climatic conditions will be very different from the past.

There is a need for all to step up in taking responsibility. This requires several factors to come into play: organisational and/or institutional attribution of responsibility, a sense of agency among individuals, and a plan of action.

There is a burning need to invest in capacity building, knowledge sharing and skills enhancement, with training on both the climate and risk management in every organisation.

Support is needed to implement climate adaptation solutions on the ground. Those most affected, including vulnerable people, should be fully involved in adaptation planning and implementation.

Better coordination within, between and across national authorities, and the EU level is also paramount. This can enable co-benefits with social cohesion, economic success, health, nature protection, sustainable and regenerative food and water systems, as well as security.

Equipping risk owners with the necessary tools

“Data needs to be more accessible and decision-useful.”

High quality data and tools are at the heart of observing change and taking informed action. The EU has excellent scientific climate data, models and tools, such as Destination Earth or Copernicus, but these are not readily accessible for many potential users.

There was a clear recognition that data needs to be made more usable – tailored for specific audiences at the right scale and structure – even under uncertainty. Data can always be improved, but the need for more data cannot excuse inaction when there is good enough knowledge. Risk management processes in the insurance sector can provide a good reference point.

Nature-based solutions, health sector preparedness, good communication and tackling disinformation are all important tools and levers.

It was also strongly stressed that climate preparedness should be informed by worst-case scenarios and consider limits to adaptation: what can we adapt to, at what global average temperature rise, for how long?

Climate change increases the risk of structural scarcity with different groups in society facing unequal resource access, and some areas will be losing their ecological carrying capacity. We need to understand how much time we have under which conditions to safeguard what we value.

Financing climate resilience

“If climate impacts are not on balance sheets, there is no incentive to act.”

Climate resilience needs to be seen as investment, not a cost. It is much cheaper and beneficial in a broader sense to invest in tackling climate change and preparing for its consequences, rather than paying for the damage afterwards.

The cost of inaction, by contrast, will be insurmountable. Businesses and governments need to better understand the costs they face. On the part of authorities, financial preparedness needs to be built to avoid deep cuts in other budget lines when disaster strikes. Investments should be mapped to the risk horizons identified in the European Climate Risk Assessment.

The EU Corporate Sustainability Reporting Directive can help businesses integrate climate resilience in corporate functions that have been less involved so far and contribute to improving the green premium, or ‘greenium’, in the markets. Where a lack of resilience in business models is exposed, the cost of capital will increase and access to finance will diminish, spurring efforts to act on climate impacts.

The EU and governments can play a role in designing and piloting dedicated financial instruments. There needs to be better access to and better spending of existing finance, shifting away from harmful subsidies and pricing physical climate risks.

Positive tipping points for action

“The flipside of fear is action.”

Positive narratives and clear communication can have a big impact on encouraging more climate action. This is especially true where avoided damages are often invisible to many, such as in climate disaster prevention. However, through clear messaging and education efforts, people can be convinced about the worthiness of preparing for the consequences of climate change and can understand how climate action can make their lives safer, healthier and more prosperous for the future.

The social dimension needs to be put at the centre: are better lives being created? Education is hugely underestimated as a tool to empower and generate momentum, as is speaking to the values that people hold. They should be addressed as citizens, not only as consumers.

Food systems are one of the examples where positive tipping points can work. In this case, to reach the point where acceleration of self-propelling change could happen, what is needed is, among others, sharing risks to reduce the burden at the farm gate, facilitating access to better advice, and focusing on outcomes rather than definitions.

Commissioner for Climate Action Wopke Hoekstra concluded that the European Commission will take its responsibility very seriously and push climate resilience forward in the coming mandate. The EU will work together with all stakeholders from the local, regional, and national level across the Union, as well as with international partners to build meaningful cooperation.

Commissioner Hoekstra also told the participants that their contributions and insights were very timely and pertinent as the Commission starts developing the Climate Adaptation Plan identified as one of the key deliverables for the next Commission mandate. To make the Plan work for everyone and to ensure match the needs and realities of the society and economy, open and inclusive discussions in the preparatory stages are a key for success.