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Four out of five SMEs fear impact of climate change on their business
Heavy rain and droughts are seen as the most significant climate change risks.
Staff on November 7, 2016
Climate change is a major concern for small and medium-sized enterprises (SMEs), according to Zurich Insurance Group’s (Zurich) fourth annual global SME survey.
Almost four-fifths (78%) of SMEs surveyed expected risks associated with climate change to have a significant effect on their business.
Heavy rain (22%) and droughts (20%) are seen as the most significant climate change risks for small and medium-sized enterprises.
Material damage (36%) and business interruptions (26%) are expected to have the most severe impacts on these businesses and are the most difficult risks to protect against.
The survey, which polled 2,600 C-suite executives and managers at SMEs in 13 countries in Europe, the Americas and Asia Pacific, revealed that downpours and heavy rain (22%) and droughts and severe heat (20%) were the natural events believed to have the most potential to hurt business.
More than one-third (36%) of SMEs considered material damage as likely to be the most critical risk to business due to climate change. The next-greatest risk related to climate change was thought to be the threat of business interruptions (26%).
Additional risks that could arise due to climate change included supply chain interruptions, potentially higher costs for energy and water, and the impact of climate extremes on employees’ health, according to 14% of survey respondents.
While a few multinationals are believed to be looking into potential business opportunities related to mitigating climate change, virtually none of the SMEs surveyed saw climate change offering business opportunities – they did not see avenues to profit from climate change.
The global survey revealed significant regional differences in terms of how climate change risk was perceived, and the potential impact it might have.
SMEs’ managers in the U.S. were most keenly aware of the potential impact climate change could have on the businesses they run. Only 6% expected no impact. Over three-quarters of respondents were concerned about the impacts of extremes in precipitation, including the effects of heavy rain and floods, as well as droughts.
Only 13% believed that hurricanes and tornadoes posed a high risk.The survey also found that U.S. SMEs were most concerned about the potential impact of climate change on their workforce. More than one-quarter (26%) of U.S. SMEs perceived the health status of their workforce as their second-biggest concern related to a changing climate after material damage that climate change might cause (47% ranked it as the top risk).
Four out of five SMEs fear impact of climate change on their business
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