Systemic Risk for Transition

The world is facing a new era of risk, where global trends, such as climate change, technological advancement, demographic shifts, and increased connectivity are making societies more vulnerable to large-scale, interconnected threats. These “systemic risks” can cascade across sectors and borders, amplifying their impact on health, security, business, and overall wellbeing.

This project, co-funded by AXA XL is part of the Cambridge Systemic Risks Hub (CSRH) at the Cambridge Centre for Risk Studies. The research goal is to deepen understanding of systemic risks, with a particular focus on the challenges and opportunities arising from the global transition to a low-carbon economy (“climate transition risk”). The shift to a low-carbon economy will have far-reaching effects on geopolitics, technology, social cohesion, and business. By focusing on climate transition risk, the project aims to help societies and businesses anticipate and manage the uncertainties and opportunities of this transformation.

The key Research Activities include :

• Developing scenarios, models, and counterfactual studies that combine insights from natural sciences, economics, politics, and social sciences to map out how systemic risks might unfold.

• Translating complex research into practical proposals and communication activities to raise awareness and support decision-makers in managing these risks.

• Maintaining a flexible, responsive research approach, with annual planning cycles to adapt to new findings and emerging threats.

This initiative brings together leading researchers, industry experts, and policymakers to foster innovation in risk management and build a more resilient future for all, aiming at informing the insurance industry and broader stakeholders on how to better respond to complex, interconnected risks. It will also support the development of new risk management tools and financial instruments.