CEO/CFO Climate Risk Survey Results
How prepared are top firms?
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Risk climate often means events that leaders perceive as business threats…but what if the threat to business is climate risk itself?
COVID-19 infection tolls capture headlines and disrupt business. Yet mounting climate risk remains relatively unnoticed as it continues to exacerbate the impact of natural catastrophes—for which there is no vaccine.
A recent survey tells the story. More than 3 in 4 (77%) CEOs and CFOs of the largest companies in the world admit their firms are not fully prepared for the adverse financial impact of a changing climate. Moreover, 8 of 10 (82%) believe that their companies have somewhat to no control over such an impact on their businesses.
The findings stem from a global survey of several hundred CEOs and CFOs at companies with US$1 billion or more in revenue across a wide variety of industries in North America, Europe and Asia/Pacific. FM Global commissioned the research conducted by ENGINE Insights, a leading market research and analytics firm.
Three-quarters of respondents (76%) said that their organizations are somewhat to significantly exposed to climate risk. Floods, droughts and wildland fires topped the list as the three exposures that “concern their companies the most” and “could most negatively affect their financials.”
“The findings are concerning as hurricane and wildfire seasons begin in the U.S. and the threat of flood is on the rise globally, combined with the challenges the pandemic has placed on businesses—many of which are fighting to survive and recover,” said Katherine Klosowski, vice president, manager of natural hazards and structures at FM Global.
“The combination of being underprepared for natural catastrophes, volatility in financial markets, and the threat of an economic recession couldn’t come at a worse time for many companies,” added Klosowski.
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 over the next 10 years.
“Fortunately, 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 Klosowski. “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.”
Review the survey for full details and consider how prepared you are to withstand loss from increased climate risk. FM Global offers the resources below and much more to the public to prevent property loss from these hazards before they strike.
Download the 2020 CEO/CFO Climate Risk Survey
Related resources:
Hurricane, Typhoon and Cyclone Loss Control Center
Risk, Reputation and Accountability: A governance perspective of disruptive events
Understanding the Hazard: Wildfire and Bushfire
Contact an FM Global representative