New data from specialist re/insurer Beazley suggests that short-term concerns about the energy transition may be deflecting focus away from climate change as the environmental issue of most concern.
However, Beazley’s survey of 2000 senior business leaders also shows that the long-term threat that climate change poses is rising to the top of boardroom agendas, as more than one in four predict that this will be their most pressing risk in 12 months’ time.
The insurer reports that more than a fifth of global business leaders believe that energy transition risk is the top environmental concern, with worry highest in the UK, out of the four markets surveyed by Beazley, which also include the US, Canada and Singapore.
The US, with its greater onshore energy resources, was found by Beazley to be less concerned with transition risk, with greenhouse gas emissions instead, and the costs associated with reporting on them, being the greatest environmental concern for a quarter of US business leaders.
But Beazley’s data also shows that a lack of business preparedness for climate-related risks has led to a quarter of global business feeling unprepared to face the impacts of climate change.
Small and medium businesses are feeling most exposed, with 28% of firms that generate under £100 million revenue noting they are unprepared, versus 21% of businesses with revenue over £100 million.
Additionally, business confidence in environmental risk resilience is dropping fast, particularly following the impact on energy resources caused by the Russia/Ukraine war over the last 12 months, which Beazley says has significantly impacted on business leaders’ thinking and perception of resilience.
“The energy transition, undoubtedly linked to the Russian invasion of Ukraine, has become the key area of concern globally,” commented Bob Quane, Chief Underwriting Officer at Beazley.
“For business leaders facing this immediate crisis, it is unsurprising that the focus is on mitigating the short-term impacts rather than focusing on the steps they need to take to adapt for the long-term,” Quane explained.
“However, the current low levels of resilience that many business leaders feel in the face of climate change, coupled with the reality of the effects we have seen over the past 12 months, means a change of mindset is urgently needed.”
