Storm clouds loom for Asian companies unready for climate change
Increasingly severe flooding poses challenges from finance to farming. Nowhere in the world is more vulnerable than Asia from the inundation threat stemming from climate change.The impact of the Thai floods was keenly felt by reinsurance companies, which insure insurers for extreme events. "Reinsurance companies did not expect to have such a significant loss from this particular market," an insurance analyst told Nikkei.
BANGKOK -- Asia has been battered in 2018 by a series of extreme weather events such as floods and typhoons, and the prospects for coming decades are bleak with rising temperatures set to spur even more severe cases of inundation.
While many governments are taking steps to reduce climate change-inducing emissions, the compromises agreed upon at the recent COP24 climate summit in Poland are unlikely to stem the heating.
This places the onus on companies operating in the region to protect themselves against environmental threats. And there are numerous examples of the consequences of inaction.
Among the most graphic, the 2011 floods in Thailand were the worst in the Southeast Asian country in five decades, affecting global food supplies and knocking out manufacturing chains for everything from car components to semiconductors. The World Bank estimated it caused losses of $46 billion, and insurance payouts ranked among the top 10 of all time globally.
While Toyota Motor -- with 8% of its global production in Thailand -- saw production affected at three plants there and one in Japan, a rival was hit even harder. Honda Motor was forced to ditch its earnings forecast for the year, suspend its Thai operations -- accounting for 4.6% of its global output -- for months, scrap over 1,000 swamped vehicles that had not been moved in time, and also halt production at a plant in Malaysia.
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