In times where the most prominent topic is climate change, it is important to reflect on the possible scenarios that may occur on European soil; extreme temperature rise, reduced precipitation, rising ocean temperatures, increased risk of forest fires and reduced economic value of forests are some of the possible scenarios that experts predict for the coming decades.
The responsibility to avoid an environmental catastrophe falls not only on the habits of our society, but also on companies and governments, "this is a matter that has to be dealt with between the world and national authorities, in a prespective multistakeholder"Says Artur Lucas, Director of Marketing and Communication Zurich Zurich.
In an interview with the Economic Journal (JE) on how companies can manage the impacts of climate change, taking into account the recent Climate Summit in Katowice, Poland, Artur Lucas says that "climate change affects the entire planet and its effects will cross the next generations "and that it is up to" companies, NGOs and citizens [darem] their contribution, which is a profound transformation in the way we live, move and how we spend our money. "
Extreme climatic phenomena are among the five major risks identified by the Portuguese entrepreneurs consulted for the study "Regional Business Risks 2018" recently launched by the World Economic Forum in collaboration with the Zurich Group and the Marsh & McLennan Companies. "Drawing a new balance that avoids the vulnerability of people, families, communities, assets and businesses is more important than ever," Vinca said.
In a more in-depth analysis, Zurich has developed a report entitled "Managing the Impacts of Climate Change: Responses to Risk Management", which presents risk management solutions, recommendations and strategies for companies to cope with global climate challenges. The insurer suggests that preventive measures be implemented based on three steps: identifying the greatest long-term business and strategic risks, developing a thorough view of risks, including branches, and developing a mitigation strategy involving insurance and resilience as well as strategic implications for business models.
The study comes up with recommendations and risk management tools that are "very relevant for companies to reflect on their exposure to the risk of climate change and to take the necessary steps to increase their resilience to the phenomena that result from them," explains Artur Lucas in declarations to the JE.
"The implementation of this strategy lies in the principle that prevention is the best protection, since the costs of adaptation to the effects of climate change can be significantly lower than the costs of the damage caused. It is therefore crucial that companies are aware of their climate risks, set priorities for action and implement a climate change adaptation strategy, "
A good example of the weight of these costs is the United States, which anticipates spending hundreds of billions of dollars by the end of the century, harming various sectors from human health to infrastructure and agricultural production.
Hundreds of billions of dollars is how much the US will pay in the face of climate change
This reality may be one for Europe, and Luke states that "in the face of these scenarios and translating with practical examples, it is very likely that phenomena such as heat waves, storms, hurricanes, floods and landslides will strongly affect support infrastructures to the European economy, as is the case of motorways, bridges, airports, dams, buildings, warehouses and even the functioning of cities, "he explains.
However, in the eyes of Zurich, this business spending on combating climate change must be seen as an investment which will benefit not only the company itself but also the communities and which could result in the expected saving of lives and routines. "For every dollar invested in prevention measures, an average of five dollars is saved in recovery efforts," says the director.
"The global trend is to devalue prevention and channel efforts to recover damages, but we must reverse this," says the director. "Prevention and protection should be seen as an investment that results in multiple benefits and not as a cost," he concludes.
For these measures to be implemented, it is important that the business model of each company be reviewed, "it is very likely that many economic agents will have to change their activity in order to survive this profound change in habits that are approaching. The way companies adapt will vary from company to company, from sector to sector and from region to region, but Zurich's three-step strategy can be an important aid in this process of reflection, prioritization and action " , explains.