Climate change may present economic opportunities for insurers. (Photo: Shutterstock)

An overwhelming majority of C-suites at the world's largest companies say mitigating climate change impacts is now a top business priority.

In a new report, FM Global surveyed CEOs and CFOs at companies around the world with $1 billion or more in revenue about their views on extreme weather events and climate risk.

The 2020 Climate Risk Survey found more than 3 in 4 (77%) CEOs and CFOs say their firms are not fully prepared for the adverse financial impact of a changing climate. Additionally, 8 out of 10 (82%) believe their companies have somewhat to no control over such an impact on their business.

Three-quarters of respondents (76%) said 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."

Managing hurricane season, worsening flood risks and a pandemic

Heading into the most active months of hurricane season, the climate risks for businesses are likely exacerbated by the COVID-19 pandemic.

"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.

FM Global says its 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 the failure of climate change mitigation and adaptation, as top risks over the next 10 years.

Fortunately for companies, Klosowski says most losses from climate-related events are preventable with the right preparation and resiliency tactics.

However, Klosowski adds, "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."

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Most CEOs, CFOs say addressing climate risk is a top business priority

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