Douglas Barnett, head of customer risk management AXA Insurance, called on industry to push down into its supply chains to see where climate change would have the greatest impact and help their suppliers and customers where they can.
He pointed out, “The automotive industry works on a just in time basis. How climate change can affect the US is that most components are coming from the Far East, so if a ship is sunk or delayed there, it will have a huge impact in the US.
Barnett’s comments on the importance of supply chains also linked to his argument that more support is needed for small and medium sized enterprises (SMEs) who make up the bulk of UK companies. Many of them will be suppliers and customers to larger businesses, but they are less able to absorb the likely effects of climate change than the big companies where attention tends to focus now.
Business should also think about how more extreme weather could affect their employees. “They must think about their employees, because if they have no people, most businesses won’t trade,” said Barnett.
He called on the Government to do more to encourage business to improve its response to climate change. “It can’t help if you keep hitting business with a stick. You have to give incentives.”
Lee Coppack is editor of Catastrophe Risk Management.