Thursday, March 27, 2008

Business Continuity Expo survey says climate change a top risk Climate change will be considered a major threat to business in the next ten years according to a survey out today on “emerging risks” conducted by Business Continuity Expo 2008 and sponsored by Marsh, the world’s leading insurance broker and risk adviser. 87% of businesses see climate change as the single biggest threat in terms of risk assessment and the effect it could have on their businesses future growth, with many at a loss as to what can be done in order to prepare or plan for this eventuality. This threat to the continuity and long-term success of their business is ahead of terrorism, pandemic flu, flooding, the credit crunch, government red-tape and outsourcing and offshoring. The survey was conducted amongst 150 major UK and European companies.

Also of great concern to 83% of businesses is the risk that traditional sources of energy will reduce and the cost of oil and gas will rise so significantly over the next 5 years that it will have an adverse effect on the smooth running of their business. Sixty percent are not prepared for this eventuality and see it as a major threat which indicates a gap in their knowledge regarding alternative sources of energy and are awaiting an answer instead of pro-actively seeking an answer.

At next week’s Business Continuity Expo, which will be held at London’s Excel from 2nd-3rd April, one of the most popular seminar and keynote sessions is expected to be around the issues of business continuity and outsourcing. This is mirrored in the concerns of business continuity practitioners who have responded to the survey and have grave concerns over the shortcomings and risks of their own outsourcing and offshoring practices. Although these have been undertaken as a means of cutting costs, 65% are worried that the they have underestimated and poorly understood the risks associated with outsourcing and offshoring with 46% admitting that in some cases the risks outweigh the anticipated benefits and they are not prepared for interruptions or breaks in their outsourcing and offshoring practices.

…Following the floods of 2007 and the recent storms, 74% of businesses see adverse weather as a real threat of which 70% are prepared. However, 40% of small manufacturing firms and 50% of large retails firms who see adverse weather as having a significant effect on British business admit to not having a plan in place.

Martin Caddick , Leader of Marsh’s Business Continuity Management team, said: “Climate change and energy risk consistently rank among the biggest challenges facing global businesses in 2008. While the majority of firms surveyed have accurately identified the major risks that could affect their businesses, fewer seem to be successful in tackling them head on. This lack of preparedness continues to be a major issue for European firms in today’s turbulent times.”

The Great Mississippi Flood of 1927, U.S. Route 51 between Mounds, Illinois, and Cairo, Illinois. River stage at Cairo, 52.8 feet. From "The Floods of 1927 in the Mississippi Basin", Frankenfeld, H.C., 1927 Monthly Weather Review Supplement No. 29. From Wikimedia Commons

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