Zurich Insurance Group has called on businesses to act now and prepare for climate change, as internationally-agreed targets for lower greenhouse emissions look set to miss their mark.
The new report from Zurich outlines three steps it believes will help companies develop a climate resilience adaptation strategy.
These steps include identifying the broad business and strategic risks; developing a granular view of the risks including individual locations; and developing a mitigation strategy involving insurance and resilience, as well as strategic implications for business models.
“Our analysis suggests that the current level of efforts to keep global temperatures from rising over 2-degrees Celsius above pre-industrial levels will likely fail, so businesses should prepare for the physical consequences of a warming planet,” said Alison Martin, Group Chief Risk Officer and Member of the Executive Committee.
“Companies must know the magnitude of their climate risk, so that they can prioritize actions based on their particular circumstances. It’s crucial for businesses to develop a climate resilience adaptation strategy and act on it now.”
Furthermore, Zurich has developed a scorecard that attempts to measure progress and commitment in critical areas, and to detect changes in direction around climate change.
Zurich says that, while good progress has been made, its scorecard shows efforts are still falling short of what is needed to sustainably transition the global economy and societies to a two celsius scenario.
It’s hoped that technological breakthroughs, such as in carbon capture or electricity storage can significantly alter the profile of climate change and the commensurate risks and opportunities that present themselves, states Zurich.
If not, the longer it takes to adequately tackle global warming, the greater the efforts and disruption will be needed in the decades ahead to counter the rise in extreme weather events.
“At Zurich, we encourage building more resilient critical infrastructure, which can help our customers and governments adapt to climate change,” added Martin.
“We firmly believe in prevention as the best form of protection. Adaptation costs for climate change effects may be significantly lower than damage costs.”
“For example, through our Flood Resilience Program, Zurich has demonstrated that every dollar spent on flood prevention measures on average saves five dollars on recovery efforts should a flood event occur.”