As COP27 gets underway, Aussie execs care less about extreme weather risks

However, Australia’s execs aren’t very concerned about extreme weather risks, according to an Executive Opinion Survey released by the World Economic Forum (WEF), Marsh McLennan and Zurich Insurance Group.

“It’s important that as we become aware of new risks, we do not forget existing and known risks,” said Jaimie Sach (pictured above), chief risk officer for Zurich Australia and New Zealand. “It’s very important that we do not lose sight of prioritising a cleaner future and building resilience to extreme weather.”

According to the survey, Australian executives identified the cost-of-living crisis as the top threat to their businesses followed by rising inflation and the debt crises. Geo-economic confrontation came in at position four with failure of climate-change adaptation next. Risks relating to extreme weather didn’t make the top five.

“This year’s findings are in sharp contrast to 2021’s findings, particularly in key areas such as technological and environmental risk,” said a Zurich media release. “Environmental issues featured significantly lower as a top five risk for G20 countries in this year’s report, compared to 2021.”

Sach said this lack of urgency around environmental risks among Australia’s leaders could be explained by the timing of the survey.

“The survey was conducted between April and August 2022, meaning Australia’s current flooding, and indeed recent issues related to cyber security, had yet to come to the fore,” he said.

Sach said one key lesson from the report is how quickly the risk landscape can shift.

“It serves as an important reminder that not only should we protect ourselves against known risks, but we should also look out for new risks which can become sizeable very quickly,” he said.

He also said the top five risks perceived by Australian executives aligned closely with the concerns of other G20 nations.

“Rapid and/or sustained inflation was voted the top risk by more than one-third of G20 countries,” he said. “This was followed jointly by the debt crises and the cost-of-living crisis, which were also among the top concerns listed by Australian business leaders.”

However, he said some Australian executives did not include risks like severe commodity price shocks or geo-political contestation of strategic resources, which were concerns in other countries.

Sach said this compilation of thousands of executives’ opinions is useful data.

“Zurich is constantly monitoring and analysing the risk landscape to ensure we can protect our customers and help build their resilience, he said. “Creating awareness of risks is the first step to managing potential adverse outcomes.”

The survey, by the World Economic Forum (WEF), Marsh McLennan and Zurich Insurance Group involved interviews with 12,000 business leaders around the globe including more than 100 in Australia.

Read more: Short-term economic worries dominate business concerns – survey

The succession of repeated flooding events across NSW, South Australia and Victoria continues. One focus of the current inundations is northwest NSW where the outback town of Walgett is surrounded by water. Helicopters are flying in bread, milk, and medical supplies.

“The situation at the moment is that we are totally isolated,” said Tiffany Loeve from MGA Insurance Brokers (MGA), a broker’s assistant based in the area. “All roads in and out of Walgett are closed except for use by essential vehicles.” In a jaw dropping picture provided by Loeve, her own home is like a small island in a lake.

At the COP27 meeting in Sharm el-Sheikh , for the first time, leaders from more than 200 countries are debating whether to set up a loss and damage fund to help compensate developing nations suffering the impacts of climate change. The compensation would involve holding wealthier nations accountable for the fossil fuel driven damage they’ve caused.

“Developing countries, the countries that are the victims of climate change, have been calling for it for many years,” said Michael Gerrard, director of Columbia Climate School’s Sabin Center for Climate Change Law in a report by the School. “But almost none of the developed countries have any interest in paying it.”

According to news reports, Austria, Belgium, Denmark, Germany, and Scotland have all committed money to the fund.