Blog 2 May 2024 minute read

The End of Risk and the Last CRO: How Climate Adaptation Will Change Your Business Forever

In 1992 Francis Fukuyama published ‘The end of history and the last man’¹. He argued – this is an abridged version of his thinking – that the end of the Cold War would mean an end to progress for humankind, as progress derives from intellectual, philosophical, and political conflict.


In this article, I will argue the case that the climate crisis and the necessary adaptation will be a similar seismic event for risk management. Financial materiality as the basis for transformational change, eventually changing the direction and goal of the profession profoundly.

Henk-Jelle Reitsma | RiskSphere
Henk-Jelle Reitsma

The end of risk: the risk singularity

Early this century, I saw an interview with mathematician and theoretical physicist Edward Witten, in an episode of ‘Of beauty and consolation’ by the late Wim Kayzer².  
Witten tries to convey the concept of singularity. He draws on a chalkboard a cigar shape and explains that the plane is space, and the length of the cigar is time. The closer you get to the end of the cigar, the more these two become one.  
There are rules which apply to time and space and help us understand these, but the rules and equations fall apart when time and space become meaningless because they become what is called a ‘singularity’ at the start of time – which is at that point itself meaningless. I hope you are still with me.  
If we ever have hopes of understanding the universe, Witten says, we need a set of rules and equations which explain the whole cigar and not just a part of it.  
This interview and its contents came back to me when I was thinking about something much more mundane and less conceptual, but critical for our planet and species – climate risk.  
Risk managers are no theoretical physicists, well, several of them are – but not me, but still, we also have a universe, the ‘risk universe.’ It is used to point to everything which could or is a risk to a company. From it, you distil a risk taxonomy, and based on this you build a risk management approach. In risk, as in life, scoping is everything.  
Currently, climate risk is being approached as a separate risk type for which regulation is being drafted, approaches are chosen, data is collected, dashboards are created. This is all well, but there is one extra element I would like to add in the discussion, and it echoes Witten and his singularity.  
Witten goes back in time to the birth of the universe and declares that time and space become a singularity. I propose that when we go forward in time, and maybe only as much as half a century, eighty years, the distinction between climate risk and all other risk types becomes irrelevant.  
Geopolitical risks will explode due to climate change, business models will collapse due to climate change, economic realities will alter due to climate change, operational risks will manifest itself or change beyond belief due to climate change, financials will go off the charts for companies due to climate change. 
My point is: if you somewhat change the horizon with which you look at it, risk management reaches its own singularity, a risk singularity, in which the current rules do not apply, and we need a novel approach. Climate risk is to traditional risk types what gravity is to time and space in the early days of the universe. Quite literally, the end of risk at the end of time. Or, to put it slightly differently, in time all risk becomes irrelevant. As the famous lines in the Bhagavad Gita go, ‘Now I have become time, the destroyer of worlds’.  
I do not think we consider the longer term enough in risk management approach. In addition, we use a traditional risk management approach to climate risk. Both mean there is a lot of work still ahead of us. This brings me to the second part of this diptych. 

The last CRO: why the risk management function will change beyond recognition

The changes above will mean the risk function of any company needs to internalize a longer horizon and a broad and deep knowledge of climate and sustainability risks.  

Simultaneously, this does not mean the risk management function can lower the bar on classical financial and non-financial risk. Climate and sustainability knowledge and management and mitigation of the risks intertwines and adds to the scope of responsibility of Risk.  

In addition, taking on the role of CRO or a role as senior leadership in companies is increasingly becoming not for the faint of heart. There is more that can go wrong than right, and personal liability is also increasing due to more stringent governance rules and the fallout of public opinion.  

But is this bad? It depends on your point of view. Fukuyama, whom I introduced above, was inspired by Friedrich Nietzsche, in a sense his intellectual ancestor.  

Nietzsche, in his book ‘Thus spoke Zarathustra,’ introduces the concept of ‘the last man’³. The last man is the archetypal passive nihilist. He is tired of life, takes no risks, and seeks only comfort and security. The last man represents a culture which seeks only passive comfort and routine, avoiding everything that could potentially bring risk, pain, or disappointment. The society of the last man is antithetical to Nietzsche’s theoretical will to power, the main driving force and ambition behind human nature, according to Nietzsche, as well as all other life in the universe. 

I would like to turn this into a badge of honor. Those who dare to lead in risk management in the current environment and near future do not shy away from a challenge, they do not seek passive comfort or routine and are embarking – leading the way – on a road less travelled.  


  1.  Fukuyama, F. (2012). The end of history and the last man. Penguin Books. 
  2. Witten, E. Interview in “Of Beauty and Consolation.” (retrieved January 2024): 
  3. Nietzsche, F. (2006). Thus spoke Zarathustra: a book for all and none. Cambridge University Press.  

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