This study proposes a novel managerial framework for strategic management in response to climate change that is based strongly on a risk-management perspective. The authors first argue that climate change has unique characteristics that pose unprecedented challenges to firms and managers. Their managerial framework then focuses on how firms can improve performance and reduce future volatility of financial returns by:

1. identifying the risks associated with climate change
2. assessing the climate risk impacts on the strategic objectives of the firm
3. integrating the risk assessment findings into strategic decision making, and
4. implementing measures to mitigate the risks and exploit new opportunities

Each component of this Climate Risk Planning framework is accompanied by a detailed discussion of the relevant theoretical foundations and is illustrated with examples and suitable strategic decision-making tools.