The sense of urgency is rising like a hot thermometer.

In BlackRock Chairman and CEO Larry Fink's latest annual letter to CEOs, he sounds the climate change alarm in a way that should make everyone in business and finance sit up and pay attention.

And for the first time ever, the World Economic Forum's annual Global Risks Report shows all five of the most likely global risks according to survey respondents to be climate-related.

Larry Fink publishes a letter every year addressed to the CEOs of the companies BlackRock invests in. For several years he has used the letter to step up a call for companies to create value for all stakeholders, to embed a greater sense of purpose within their companies, and to focus more on environmental, social and governance risk.

This year the letter reads as if he had seen a ghost.

"Every government, company, and shareholder must confront climate change," he writes.

Fink points to the kinds of disruptive questions climate change is raising, and the growing chorus of investors around the world asking them. "Will cities, for example, be able to afford their infrastructure needs as climate risk reshapes the market for municipal bonds?" he writes. "What will happen to the 30-year mortgage - a key building block of finance - if lenders can't estimate the impact of climate risk over such a long timeline, and if there is no viable market for flood or fire insurance in impacted areas? What happens to inflation, and in turn interest rates, if the cost of food climbs from drought and flooding? How can we model economic growth if emerging markets see their productivity decline due to extreme heat and other climate impacts?"

Because of these questions, Fink predicts an accelerated reallocation of capital, coming faster than we see the evidence of climate change itself.

One day after Larry Fink's letter was circulated, the World Economic Forum presented its annual Global Risks Report ahead of its 2020 Davos summit, and climate risks took center stage.

In a ranking of the most impactful and the most likely risks over the next ten years, the top risks listed by likelihood are: extreme weather, climate action failure, natural disasters, biodiversity loss, and human-made environmental disasters. Listed by impact, the top five are: climate action failure, weapons of mass destruction (remember that?), biodiversity loss (this means food shortages), extreme weather, and water crises.

WEF notes that these risks are interconnected, and that the urgency is rising. In his preface to the 2020 report, WEF President Borge Brende writes: "On the environment, we note with grave concern the consequences of continued environmental degradation, including the record pace of species decline. Respondents to our Global Risks Perception Survey are also sounding the alarm, ranking climate change and related environmental issues as the top five risks in terms of likelihood - the first time in the survey's history that one category has occupied all five of the top spots."

The report points to turbulence as the "new normal" and raises concerns that multilateral institutions may not be equipped to address the geopolitical, environmental, economic and social risks on the horizon. Social upheaval and "fraying fundamentals" are seen as grave global problems. And the report emphasizes economic costs of climate change. It quantifies the economic stress and damage from natural disasters in hundreds of billions of dollars every year, and emphasizes that humanity has little more than a decade to reverse global warming trends, as indicated by scientists. Dystopic scenarios around cyber security are also identified in the report.

For business leaders, the Larry Fink letter and the WEF report are strong reminders of the importance of strategic and structured risk management. Companies need to have governance and corporate culture in place able to identify and prevent risk. They need to increasingly layer risks related to environmental, ethical and human aspects onto the usual financial and operational risk mitigation processes. These new ESG (environmental, social and governance) risks need to be assessed and prioritized, and appropriate responses needed to be readied and implemented. And these new risks and responses need to be communicated and reported on to stakeholders, including shareholders.

COSO, a committee set up by five major accounting and auditing associations to provide guidance on enterprise risk management (ERM), teamed up with the World Business Council for Sustainable Development and produced a framework for using an ERM approach to manage ESG risks. The framework helps businesses understand how to create a risk-sensitive culture, strategize and prioritize around risk, and take action to bolster resilience.

Some of the actions COSO advises are mapping the company's mandatory or voluntary ESG requirements, embedding ESG-related skills in hiring practices, conducting an ESG SOT analysis, understanding metrics for expressing risk, identifying external changes that may affect business objectives, and reporting relevant risk information internally for decision-making.

At a time of increasing intensity, complexity and pace of work, getting a handle on the vast panorama of interconnected risks that looms for an organization, and making plans around how to position the company to weather them, is more important than ever.

All this may sound complicated. In his letter, Larry Fink directs CEOs to two frameworks for reporting: SASB and TCFD. SASB is the Sustainability Accounting Standards Board, which has created guidance for reporting on material ESG risk by sector. TCFD is the Task Force of Climate-related Financial Disclosures. These offer guidance on reporting for large, listed companies. But smaller companies should be aware of these tools and the direction they are taking financial reporting, and as a consequence, the entire financial system.

Be aware, be agile, and use available tools to navigate the new world this new decade brings. As Larry Fink writes, "we are on the edge of a fundamental reshaping of finance....In the near future - and sooner than most anticipate - there will be a significant reallocation of capital." Be ready.