Thursday, 14 August 2008

Large Companies Unprepared for Climate Change Risks

FM Global, one of the world’s largest business property insurers, recently conducted a survey among 100 of the largest US businesses. It revealed that many of those firms are not well-prepared for natural disasters and are not overly concerned about the potential business impact. While 96% of financial executives said their companies have operations exposed to natural catastrophes, such as hurricanes, floods and earthquakes, less than 20 percent indicated that their firms were “very concerned” about such natural disasters negatively affecting their bottom line.

To quote the press release; “The findings reveal a surprising and concerning gap between the levels of natural catastrophe exposure among North America’s largest companies and their level of preparedness,” said Ruud Bosman, executive vice president, FM Global, “especially given that, in the first half of 2008, there were about 400 natural catastrophes worldwide with overall losses expected to top US$50 billion".

This fits with my own impression gained from the last set of responses by IT companies to the Carbon Disclosure Project and spelled out in a recent report (Playing the Green IT Card). There seemed to be a degree of complacency that existing disaster recovery systems were adequate, when we can expect to see much more (and more widespread) disruption in the future. Indeed the more astute responses pointed to the possibility of multiple disasters at the same time and also that whilst the companies themselves might not be impacted there would be knock-on effects such as power shortages and blackouts, telecoms failures, medical epidemics leading to resource shortages, inability to get to work or travel on business, and the impact on suppliers, distributors and resellers.

Of course whilst this is a risk to IT suppliers it is also an opportunity. The disaster recovery market will inevitably expand significantly in the coming years as climate change starts to have a real impact on global weather patterns.

© The Green IT Review

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