Severe weather events heightening business resilience and supply chain risks

London, 8 June, 2011 – The earth’s climate is changing and corporations need to proactively assess and manage the risks associated with a more volatile environment in order to ensure sustainability. The impact of extreme weather events and natural catastrophes, such as earthquakes and volcanic eruptions, highlight how business continuity plans need to be more rigorously assessed and managed, especially given the scope of risks embedded within complex supply chains, according to a new Marsh white paper.

Marsh’s white paper, Sustainability – the changing climate of risk, notes that predictions for further climate change are likely to have more profound consequences in the way that companies are expected to manage risk in future. Regulators, planners and insurers are demanding greater assurances that projects will not have a harmful effect on the environment and that assets and infrastructure are resilient to future changes in the climate, the report finds.

Cliff Warman, Leader of Marsh’s Environment Practice for Europe, the Middle East and Africa, said: “Sustainability is no longer considered to be a ‘fluffy’ corporate positioning issue. With environmental concerns affecting investment decisions, robust environmental risk mitigation strategies are needed if shareholders are to be protected from business-critical losses.”

With the increased use of just-in-time inventory control, any supply chain disruption could severely impact business continuity. “Across Europe, the infrastructure on which organisations rely to transport people, goods and raw materials and to power their factories, offices and homes and to supply water will come under increasing pressure from more frequent and more severe bouts of extreme weather,” said Dr Warman.

The report recommends that businesses should consider the measures that they need to take in order to adapt to an increasingly volatile environment.