Climate risk management is a generic term referring to an approach to climate-sensitive decision making. The approach seeks to promote sustainable development by reducing the vulnerability associated with climate risk. CRM involves strategies aimed at maximizing positive and minimizing negative outcomes for communities in fields such as agriculture, food security, water resources, and health.[1]
Climate risk management covers a broad range of potential actions, including: early-response systems, strategic diversification, dynamic resource-allocation rules, financial instruments (such as climate risk insurance), infrastructure design and capacity building. AI tools enable more precise forecasts and resource allocation in sectors like agriculture, allowing stakeholders to capitalize on favorable climate conditions while minimizing risks[2]. In addition to avoiding adverse outcomes, a climate risk management strategy also aims to maximize opportunities in climate-sensitive economic sectors--for example, farmers who use favorable seasonal forecasts to maximize their crop productivity.[3]
The Living with Climate Conference was co-hosted by the World Meteorological Organization, the Earth Institute and the Finnish Meteorological Institute in July, 2006. The meeting was designed to review opportunities and constraints in integrating climate risks and uncertainties into decision-making. A major outcome was the Espoo Statement.[4]
