Author
Listed:
- Laura Albuquerque
(Production Engineering Program, Federal University of Rio de Janeiro, Rio de Janeiro 27930-560, Brazil
Future Climate Group, São Paulo 04552-040, Brazil)
- Sofia Helena Zanella Carra
(Production Engineering Program, Federal University of Rio de Janeiro, Rio de Janeiro 27930-560, Brazil)
- Luan Santos
(Production Engineering Program, Federal University of Rio de Janeiro, Rio de Janeiro 27930-560, Brazil
Faculty of Business Administration and Accounting Sciences, Federal University of Rio de Janeiro, Rio de Janeiro 22290-240, Brazil)
- Giovanna Tosto
(Faculty of Business Administration and Accounting Sciences, Federal University of Rio de Janeiro, Rio de Janeiro 22290-240, Brazil)
- Heloisa Dornelles
(Future Climate Group, São Paulo 04552-040, Brazil)
Abstract
Although climate change is increasingly recognized as a material risk for firms, the extent to which climate-related risks are operationally integrated into enterprise risk management (ERM) processes remains unclear. This article presents a structured literature review to answer the question of how firms have integrated climate risk assessment, considering both physical and transition risks, into ERM processes. Following the PRISMA 2020 protocol, 22 published articles from Web of Science and Scopus, published between 2018 and 2026, were included in the review. Articles covering financial institutions, as well as policy-only and sectoral-only studies, were excluded. The articles were screened through five eligibility criteria: firm-level focus, governance, risk assessment, climate risk management and/or ERM, and type of climate risk. All articles were assessed by two researchers to reduce bias, and Cohen’s kappa was calculated. Following coding and qualitative analysis, the findings indicate that firms have advanced governance structures, disclosure practices, and analytical assessment tools for climate risk assessment, while operational integration into ERM systems remains limited. Results also reveal persistent integration gaps, including strategic–operational disconnection, temporal and methodological mismatches, symbolic implementation, and systemic and knowledge barriers. These challenges constrain the effective translation of climate risk information into risk management practices and strategic planning. Overall, the study, based only on academic literature, concludes that climate risk integration is still incomplete and weakly embedded within ERM systems. In the expanding regulatory landscape, particularly with IFRS S2, the study provides a baseline for understanding current firm-level practices and future developments in climate risk integration at the academic level.
Suggested Citation
Laura Albuquerque & Sofia Helena Zanella Carra & Luan Santos & Giovanna Tosto & Heloisa Dornelles, 2026.
"How Is the Integration of Climate-Related Risk into Enterprise Risk Management at Firm Level? A Systematic Literature Review,"
Sustainability, MDPI, vol. 18(12), pages 1-32, June.
Handle:
RePEc:gam:jsusta:v:18:y:2026:i:12:p:5900-:d:1963220
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