Climate Change Represents Risks and Opportunities for Corporations

October 27, 2014

Danish climate scientist and TV weatherman Jesper Theilgaard told risk managers from some of Europe’s leading companies that they should not treat climate change as a “doomsday” scenario. Instead, he said, they should look for the business opportunities in helping to mitigate the possible impacts and make local adaptions to the changing environment.

Theilgaard was the keynote speaker at the Federation of European Risk Management Associations (FERMA) seminar held recently in Brussels.

“The biggest risk in dealing with climate change is to treat it as doomsday and think there is nothing we can do about it. It is very important when we talk about climate change that it is not as a doomsday scenario but as risks and opportunities,” Theilgaard said.

He gave the audience an overview of many inter-related ways that the emission of greenhouse gases is changing the environment from more extremes of weather, higher sea levels, toxic air pollution and the migration of disease agents and crop pests. There are, he advised, certainly enormous risks but also great opportunities in developing long-term mitigation and local adaptations to these changes.

He pointed to the example of fresh water, which is very expensive to supply in places where there is a shortage. In addition, better ways need to be found to integrate diverse energy sources into the electrical grid. These are just two problems that can provide opportunities for companies to innovate.

He added, “Another very important area for investment is medicine and fighting diseases and pests as they migrate poleward. We see common tropical diseases like dengue fever, West Nile fever and malaria spreading – and indeed Ebola, as it is now. Insects and other pests are migrating, and our plants and trees are not able to resist. There is great need for investment as we have to be ahead of these changes.”

According to Theilgaard, for much of Europe, increased flooding is probably the greatest threat from climate change, as a result of more extreme storms and rising sea levels.

“Europe has a lot of coast line where there are big cities. We are thinking about the effects of climate change now, but we have a large stock of older buildings and infrastructure which has not taken climate change into account,” he said. “The infrastructure issue – bridges, roads and railways – is an important one for corporates to consider even if their own buildings are generally resilient.”

The increase of natural disasters related to climate change was mentioned in FERMA’s response to the EU green paper on the insurance of natural and man-made disasters in July 2013. FERMA continues to argue that large-scale solutions are beyond the capabilities of a single company. A collaborative approach through partnerships that encompasses the major stakeholders, such as public authorities, is key, FERMA said in a statement.

Coordinated planning rules and access to public data on weather and vulnerable zones across Europe are important, FERMA said.

Source: Federation of European Risk Management Associations

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