Large Companies Unprepared for Climate Risk

In its 2020 CEO/CFO Climate Risk Survey, FM Global polled 151 CEOs and 150 CFOs at large companies in North America, Europe and Asia about their climate risk exposure and preparation. While 76% of respondents said their company is exposed to climate risk and 86% said that addressing climate risk was a medium or high business priority, 77% said they “aren’t fully prepared for the adverse financial impact of a changing climate.” Of the risks potentially exacerbated by climate change, the top three concerns for CEOs and CFOs were flooding, drought and wildfires. Additionally, while three-quarters of respondents said they had dedicated staff responsible for addressing climate risk, 82% also said their company had “somewhat to no control over adverse impact of climate risk.” Ultimately, CEOs and CFOs considered senior management responsible for the adverse financial impact of climate risks—specifically, 66% said that the board of directors should be held accountable and 80% said the executive management should be held accountable. The poll’s authors stated, “If anyone wins in a catastrophe, it is companies that choose to see loss as preventable, not inevitable, and invest in preserving their company’s value through resilience.”