More than three-quarters of CEOs and CFOs at the world’s largest companies say their firms aren’t prepared for the adverse financial impact of climate change, according to a new study commissioned by FM Global.
Seventy-seven per cent (77%) of CEOs and CFOs surveyed said their organizations weren’t prepared for the impact of climate change, and 82% believed their companies would have somewhat to no control over such an impact on their business, FM Global said. Seventy-six per cent (76%) of respondents said their organizations were somewhat to significantly exposed to climate risk, listing floods, droughts and wildfires as the top three exposures that “concern their companies most” and “could most negatively affect their financials.”
“Unfortunately, these are difficult times for many companies, as they struggle with volatile financial markets and the threat of economic recession, coupled with the fact that COVID-19 may create further challenges when preparing for natural hazards,” said Katherine Klosowski, vice president and manager for natural hazards and structures at FM Global.
The survey results support an earlier report by the World Economic Forum, released just before the COVID-19 pandemic struck, that found that extreme weather events and the failure of climate-change mitigation and adaptation were top risks over the next 10 years, FM Global said.
“Fortunately, the majority of climate-related losses are preventable, highlighting the importance of building business resilience, particularly during the pandemic,” Klosowski said. “In the current crisis, achieving resilience may take more effort given the complexities caused by COVID-19, but it is possible. Lack of preparation could have a negative impact on already-fragile bottom lines.”