I've always been intrigued by the concept of risk - not the board game for wannabe megalomaniacs with the indecipherable rules, more the idea of trying to work out whether to expose yourself to the possibility of unpleasant events.

Our understanding of, and attitude towards, risk is one of the defining aspects of our personality, distinguishing the confident from the shy, the fearless from the cowardly, the indolent from the motivated, and the astute from the just plain dumb.

It is also the raison d'etre of one of the world's biggest industries in the form of insurance and its management should form one of the cornerstones of every other private and public sector organisation on the planet.

And yet, our understanding of risk always seems to me to be curiously confused and under developed.

At an individual level most of us, myself certainly included, would probably regard ourselves as a bit too risk averse. As the old maxim goes, you always regret the girls you didn't kiss, far more than the ones you did. It is almost part of human nature to look back on opportunities where we wish we had taken more of a risk, moments when we were too timid for our own good.

Yet at a social level humanity's recklessness is at times little short of terrifying. There is barely an economic, environmental or humanitarian disaster that could have not been avoided, or at the very least minimised, through a better early appreciation of the risks involved.

Apologists will inevitably claim that 20:20 hindsight is a wonderful thing and that every decision is rational at the time it is made, which is undoubtedly true. But at the same time some of the worst self-inflicted traumas of recent years (I'm thinking, global economic meltdown, disastrous occupations of Middle Eastern states, etc) were the result of some blindingly obvious risks being wilfully ignored (giving mortgages to people without any income, invading countries based on completely flawed intelligence, that sort of thing).

Climate change is of course nothing if not a risk issue.

There are plenty of environmentalists who argue that if people truly understood the risks our societies and economies now face as a result of global warming then they would be taking to the streets to demand immediate action.

At the economic level, the rationale for rapid investment in low carbon technologies and an overhaul of green legislation rests entirely on the premise that the financial threat posed by climate change is so great that it makes more sense to act now to mitigate the risks than try to cope with them later.

From the Stern Report, through virtually every other government and academic study on how to respond to climate change, this thinking has become established as conventional wisdom and been endorsed by political and business leaders the world over.

And yet, as Gordon Brown hints he wants to build a third runway at Heathrow and the Tories apparently edge away from their green commitments, it remains a colossal struggle to ensure that this apparent understanding of climate change risks translates into the real world actions that will help alleviate the threat.

The question is how do you hammer home to business and political leaders that the risks are real and that urgent action makes sense regardless of the current economic climate?

The answer is to treat them like children.

My mother, an indisputable source of wisdom who also used to work as a primary school teacher, always used to say that the reason it was so tricky to instil a sense of discipline in children was that their otherwise admirable sense of youthful invincibility meant they rarely imagined bad things would happen to them. They were almost incapable of analysing the risks associated with their actions and imagining a scenario where their misdemeanours were both detected and punished - regardless of how many times it happened.

It is a reckless streak many business leaders continue to display in older age, be it through their refusal to act to combat climate change, or, more locally, many small businesses common inability to prepare adequately for entirely foreseeable risks, such as black outs or floods.

The only answer - as any teacher who has had to face down 30 boisterous eight year olds will tell you - is to try and make the promise of reward and threat of reprisal as real and consistent as possible, until the realisation dawns that the risks associated with breaking the rules just aren't worth it.

For those seeking to help people wake up to the threat of climate change that means framing the associated risks entirely within believable contexts that an audience can understand.

For example, unless you live in the Maldives rising sea levels are too sci-fi a concept for many to grasp, but floods, wild fires and deadly heat waves are far easier to envisage.

Equally, if it is businesses that will drive the development of a low carbon economy then it is business risks that we have to focus on to stimulate the necessary investment. Global warming will result in higher insurance premiums, rising energy costs, increased geo-political instability and business disruption, and those global businesses that have risen to prominence in the last 100 years and wish to still be around in 100 years time need to be made fully aware of those risks as soon as possible if they are to survive.

As a report from the University of California this week on the potential cost of climate change for the state makes plain, these risks will have a huge and potentially disastrous impact on bottom lines and businesses need to be planning for them right now.

And if the threat of $2.5tr worth of assets being at risk from climate change in California alone is not enough to focus corporate minds, then perhaps it is time to start talking about something that will send a shiver down their spine, regardless of how hot it gets - litigation.

A separate report this week claimed that the risk of heat-related deaths will soar as a result of global warming. Now, not that I want to give the ambulance chasing lawyers any ideas, but if you can construct a strong case against cigarette companies for failing to act when they knew their were health risks associated with smoking, how long will it be until one of the firms that spent so long denying their contribution to climate change finds a high profile class action law suit landing on their desk?

Now, there is a risk business really should be able to understand.