While finding ways to recover from the coronavirus pandemic remains a global focus, climate risk is simmering in the background with 57% of Asia Pacific CEOs and CFOs reporting that addressing the risk is a high priority for their businesses, said mutual insurance company FM Global.
That was what FM Global found in its online survey of 151 CFOs and 150 CEOs in February 2020 across Asia Pacific, North America, and Europe.
Respondents lead companies with at least US$1 billion in revenue across a wide variety of industries, said FM Global, adding that one-third of respondents lead companies of US$5 billion or more.
- 87% of Asia Pacific CEOs and CFOs indicated their organisations are somewhat to significantly exposed to climate risk.
- Six out of ten businesses say that they are less than fully prepared to address adverse financial impacts caused by climate risk.
“While Asia Pacific business leaders demonstrate a strong commitment to addressing climate risk, the priority given to natural catastrophe protection is concerning as typhoon seasons begin in the region, including in Japan and China, combined with the challenges the pandemic has placed on businesses – many of which are fighting to survive and recover,” said Alex Tadmoury, senior vice president, division manager of FM Global’s Asia Pacific operations.
The combination of heightened frequency of natural catastrophes, especially in Asia Pacific, which sees more natural disasters than any other region, volatility in financial markets, and the threat of an economic recession couldn’t come at a worse time for many companies in this part of the world, he added.
The survey results build upon the World Economic Forum’s report from earlier this year, released just before the pandemic struck, that declared extreme weather events plus failure of climate change mitigation and adaptation as top risks in the next decade, FM Global noted.
“Most losses stemming from climate-related events are preventable, and loss prevention can help preserve a company’s value and resilience, especially during the pandemic,” said Tadmoury. “However, the challenge many companies will face is adequately preparing for such events if stay-at-home orders remain in place, which could exacerbate the impact climate-related events have on an already fragile bottom line.”