Global business leaders call for reporting of natural disaster risk in company disclosures
Insurance sector, the United Nations and HRH the Prince of Wales discuss measures to strengthen financial and physical resilience against natural hazards
London – Business and finance leaders and the world’s leading minds on disaster risk reduction and natural hazards today called for companies to include reporting of natural disaster risk in their company disclosures, as they met in London for a United Nations summit hosted by the International Insurance Society (IIS) and organised by Willis Group Holdings (NYSE:WSH), the global risk adviser, insurance and reinsurance broker.
The summit, which is the culmination of four years of collaboration between private and financial sectors and the UN Office for Disaster Reduction (UNISDR), was convened to help integrate the business sector and financial system within the architecture and instruments of the new global framework on disaster risk reduction to be adopted at a UN World Conference next March.
At this morning’s event, the business case for disaster risk reduction was echoed by a number of distinguished speakers. HRH The Prince of Wales spoke of the need for every section of society to protect the entire planet through disaster resilience. HRH backed the need for concrete private sector commitments to disaster risk reduction in the approach to the renewal of the UN Hyogo Framework and spoke of his belief that a full appreciation of risk underpins sustainable development.
Dominic Casserley of Willis Group, which has played a key role in bringing together the worlds of capital, science and policy to reach this point, addressed the audience on how the insurance sector is helping to reduce the human, social and financial cost of natural disasters.
“Disaster risk is playing a greater part in human life than ever before,” he said, “and it is driven by demographics, economic development and climate change. Increasingly violent and frequent weather events are affecting communities and businesses, particularly in urban areas with ever more dense populations. The UN’s global assessment of risk from disasters showed direct losses of $2.5 trillion this century.
And at a private sector level, these risks are material for many companies, leading to concerns about the future and less confidence to invest and create jobs. As an industry, we have got much smarter about understanding, pricing and sharing risk and this expertise gives us the power to respond to these greater threats.
“This is also about investment. Investors want access to meaningful information that allows them to make informed judgments about a business. Yet some of today’s most important risks are completely absent from their mindsets. Better disclosure of the real risks that businesses face will lead to improved valuations and pricing for capital, with the better returns that implies. “Stronger companies translate in to stronger communities, building new resilience for society against what is an increasingly risky world.”
Elizabeth Longworth, Director of the UNISDR, Madelyn Antoncic, Treasurer of the World Bank and Mike Morrissey, President and CEO of the IIS, were among those who also added their support to the UN’s agenda. Elizabeth Longworth, UNISDR director, told delegates:
“The business case for disaster risk reduction has been well made by many people here, not least the Prince of Wales. The private sector has never been more engaged in the work of the UN Office for Disaster Risk Reduction and this meeting today, and the proposals which will come from it, will help to ensure the integration of the business sector and financial system into the priorities for action contained in the post-2015 framework for disaster risk reduction.”