Businesses need to take action in the face of climate change

If there was one takeaway from the recent RIMS Chicago event, “It’s Getting Hot (and Windy and Wet) in Here,” it is that the impacts of climate change will continue to worsen over time, but there are steps businesses can take to protect their people, property and operations.

Hosted by Zurich North America at its Schaumburg headquarters, the event featured three climate experts from Zurich Resilience Solutions (ZRS), including Ellen Michael, AVP, Team Lead for Sales & Distribution; Bill Ingram, Vice President/Technical Operations and Dave Radomski, AVP - Sales & Distribution.

“We operate in a world of competing cats [catastrophes], earthquake versus hurricane versus wildfire,” Ingram told the audience of risk professionals, referencing a list of multiple perils. “This is the new normal.”

Acknowledging a predicted long-term upward trend in extreme weather events, Ingram referenced recent catastrophic events as evidence of just how severe the impacts of climate change have become.

“Both Hurricanes Helene and Milton were described as once-in-a-hundred-year events, yet they occurred less than two weeks apart,” he said. “Three weeks later, Valencia, Spain, received a year’s worth of rain in just eight hours.” The result was devastating flooding and mudslides that caused 220 deaths and damages that are initially expected to cost insurers $3.8 billion¹.

Change begets change; the extreme weather events of 2024 are building upon a precedent set the year before. In 2023, there were 19 separate billion-dollar weather and climate disasters in just the first six months of the year. By the end of 2023, 28 climate-related weather events, including wildfires, extreme heat, tornadoes and winter storms, triggered $93 billion in estimated damages².

While much of the current conversation about climate change is focused on rising temperatures, businesses also need to consider winter storms and freezing temperatures when assessing their risk exposures. As one example, Ingram described Winter Storm Elliott in New York as a hurricane of wind and cold. The storm’s freezing winds breached building interiors, freezing and rupturing water pipes and damaging fire protection water systems, leading to substantial and costly water damage.

Despite the challenging climate forecast ahead, there are steps companies can take to manage their risk, Michael said, beginning with a thorough assessment of the most relevant and likely risks. Does the company or its supply partners have facilities located in areas vulnerable to coastal flooding or wildfires? Do rising perils like extreme heat and convective storms pose a threat to employees whose jobs require them to be outside for much of their workday? Does the company own assets that may be vulnerable to hail, like fleet vehicles?

Companies may also want to seek risk assessment services from external providers for scenario analysis, physical risk assessment and sustainability reporting.

In late November, ZRS will launch an interactive digital climate tool, Climate Spotlight, which allows the user to specify up to 10 diverse kinds of perils, including drought, flooding, excessive heat, storm surges and others. The tool uses Zurich’s proprietary weather and climate data and can be used by businesses to quantify near term (2021–2040), mid-term (2041–2060) and long-term (2081–2100) risks to their operations, employees and physical assets and allocate capital accordingly.

“The goal is to reduce risks while building resilience at the same time,” Michael said.