ACCA: Only 20% of businesses ready for climate disasters'

Organisational survival hinges on proactive climate risk assessment – CFOs and finance teams are key to steering this transformation.

Businesses and other organisations are not prepared for weather-related disasters, with out-of-date business continuity plans failing to reflect the frequency of disruption of climate-related events, according to ACCA’s latest report, Weathering the Storm: Building Resilience Against Climate Disruptions.

This new report paints a concerning picture of organisational preparedness, with only 20 per cent of businesses and other organisations surveyed identifying climate-related risks across their operations.

Even more troubling is that a mere 17 per cent regularly rehearse their response to major disruptions, while 25 per cent have no mechanisms in place to build resilience at all.

One of just three case studies in the report highlights how the Caribbean is bringing together diverse sectors to create a climate-smart region.

However, the survey reveals significant work still remains to be done.

The Caribbean is on the frontline of climate change, facing an increasing range of risks that threaten both its economic stability and the well-being of its communities.

Over the past two decades, the region has experienced a significant surge in climate-related disasters, with the frequency of earthquakes, hurricanes, floods and other extreme weather events doubling, intensifying the challenges faced by its people and economies.

These gaps highlight an urgent need for organisations to update and rigorously test their business continuity plans to enhance resilience.

Paula Marcelle-Irish, head of Caribbean, ACCA, said: "The 2024 Atlantic hurricane season was exceptionally active, with ten named storms between September 24 and November 4, including Hurricane Beryl, the earliest Category Five storm ever recorded. These alarming events serve as stark reminders that climate change is not a distant concern – it is reshaping lives and communities in real-time."

Similarly, report author Emmeline Skelton, head of sustainability at ACCA, said: "Organisations must make climate adaptation a priority – not only to safeguard their operations but to protect the people and places at risk. Rising temperatures, more intense rainfall and swelling sea levels make the evidence unmistakable. We must act now to build resilience and mitigate further harm.

"The escalating environmental threats demand comprehensive preparation measures. Yet our survey reveals that climate adaptation planning is still not receiving the urgent attention it requires. It’s time for organisations to take decisive action to protect both their future and the communities they serve."

However, resilience is not a priority for organisations with two-thirds of respondents not investing adequately to address the physical risks posed by climate change, and only 37 per cent planning to increase spending in this area.

"Organisations with a digital-first approach can’t overlook climate risks affecting their remote workforce," she added. "To ensure resilience, forward-thinking organisations need to proactively support remote workers with measures like power backups and health monitoring to stay prepared in an increasingly unpredictable climate."

Data for the report came from ACCA's Global Economic Conditions Survey of over 600 finance professionals around the world and illustrates these concerns vividly.

Power outages topped the list of climate-related disruptions in Africa (54 per cent of respondents), while North America’s leading worries included supply chain breakdowns (41 per cent) and employee health issues (39 per cent).

CFOs and finance teams are essential to building climate resilience through risk-based planning and sustainable business strategies.

By championing transparency in emissions targets and transition plans, finance professionals play a critical role in reducing carbon footprints and advancing net-zero goals, ultimately supporting a fair, inclusive and climate-resilient future.

ACCA will be sharing the findings of this report and other research and guidance it has produced on a range of sustainability issues, at the COP29 climate summit in Azerbaijan.

The report includes toolkits for finance teams to build skills in resilience in the areas of scenario testing, crisis management planning and business continuity plans.

It also lists key actions businesses and governments must take to build resilience and address climate-related risks.