Anybody still unsure why climate change is an issue for business can read this story where the recent floods in Thailand were cited by Sony as one of the three reasons for turning their $0.6bn profit forecast turned into a $0.8bn loss.
The entire country of Thailand’s growth forecast was slashed from 4.1% to 2.6%.
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ges 8 and 9 of this 2003 report by Swiss Re show how storm losses and flood losses (see diagrams, right) have been growing exponentially since the early 1980s and by 2002 were around ten times their pre-1970s level.
In 2002 UNEP’s climate working group said that “Worldwide economic losses due to natural disasters appear to be doubling every 10 years and next decade will reach $150bn“.
The impact on insurance industry was considered significant enough to impact reserves, ratings, and solvency.
And without a strong insurance industry, the risks would pass back to business.
Fast forward to 2011 and the reality is that “once in a thousand year” storm surges are expected to happen every 30 years by the end of the century. (Once in 30 year events will also happen more often.) Continue reading →