When CEOs contemplate global warming, they see something they dread: uncertainty. There’s uncertainty about what regulations they will have to meet and about how much the climate will change ? and uncertainty itself poses challenges. Insurance giant Swiss Re sees a threat to its entire industry. The reason: Insurers know how to write policies for every conceivable hazard based on exhaustive study of the past. If floods typically occur in a city every 20 years or so, then it’s a good bet the trend will continue into the future. Global warming throws all that historical data out the window.
One of the predicted consequences of higher greenhouse-gas levels, for instance, is more variable weather. Even a heat wave like the one that gripped Britain in 1995 led to losses of 1.5 billion pounds, Swiss Re calculates. So an increase in droughts, floods, and other events “could be financially devastating,” says Christopher Walker, a Swiss Re greenhouse-gas expert.
As it turns out, the story is fairly routine and I’m not even sure its anecdotal evidence really makes the case that corporate America has gotten the message about climate change. Still, it’s worth reading primarily because it is the cover story of Business Week, and that by itself indicates something of a turning point.
Like national healthcare, I suspect that global warming will really get taken seriously only when the business community finally demands it. What Business Week documents is only the first whispers of those demands, but the endgame is already in sight.