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Editor's Pick

Organisational sustainability hamstrung by economics while weather forces new risk management

Weak global economic outlook slows environmental action, but executives can no longer ignore the implications of extreme climate events. 

The worrying juxtaposition has been identified in the latest Risk & Resilience report from speciality insurer, Beazley. It’s new analysis, Spotlight On Environmental & Climate Risk 2025, has found that 73% of executives across the world believe instability in business and finance is making it harder to meet sustainability targets. 

Conversely, while organisations are finding it difficult to keep up with environmental responsibilities, they are being forced to do more to mitigate the risk of increasingly volatile and unpredictable weather. 72% of decision-makers in the survey say they are adopting and updating their processes to identify potential dangers to operations posed by climate events such as floods, fires and drought. 

Despite the growing prevalence of extreme weather, economic uncertainty is currently perceived to be the biggest threat to business as usual. 26% of respondents agreed with this, a significant increase on 2024, when 21% believed this to be true. Overall, just 20% of the 3,500 participants said the climate change was now a top risk concern. 

‘2024 was characterised by numerous Black Swan weather events – previously once in a lifetime, they are sadly becoming the norm. But our research reveals that executives’ focus is on the uncertainties of the here and now – potentially missing the elephant in the room,’ said Paul Bantick, Chief Underwriting Officer at Beazley. 

The results point to a troubling reality in which organisations are failing to prepare for a rapidly changing climate, but economic worries are demanding most attention, stopping executives from focusing on climate preparedness. 

More reassuringly, uncertainty over regulatory complexity and changes, and the challenges of transitioning to clean energy, were found to be falling. Only 19% of the global C-suite say ESG and reporting requirements are a top priority. Meanwhile, 21% say decarbonising their power supply is their greatest current risk. 

‘In this era of accelerating risk, businesses can’t afford to underestimate the impact that climate and environmental risk could have on their business. There is reason to be optimistic however, as 72% of executives are telling us that they are adopting new risk management procedures to better mitigate the impact of extreme weather events,’ Bantick continued.

‘Insurance has a crucial role to play here, by supporting business leaders in identifying, understanding and preparing for these new exposures,’ he added. ‘And by harnessing forward looking climate risk data, and through innovative solutions, such as parametric insurance, we can help firms build resilience now, ensuring that they are better equipped to face the future with confidence.’

Image: Johannes Plenio / Unsplash

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