Executives Prioritise Economic Stability Over Environmental Sustainability

The latest Risk & Resilience report from specialty insurer Beazley, titled Spotlight On Environmental & Climate Risk 2025, has unveiled critical insights into the interplay between economic challenges and the pressing need for sustainability within organisations. As the global economic landscape reflects uncertainty, an overwhelming 73% of executives worldwide report that economic instability is hampering efforts to achieve environmental sustainability targets.

The report, which involved responses from around 3,500 executives, indicates a stark reality: while companies struggle to fulfil their environmental responsibilities, they are simultaneously compelled to enhance their risk management practices to counter increasingly extreme and unpredictable weather events. A notable 72% of those surveyed are now updating their processes to better identify and respond to climate-related risks such as floods, fires, and droughts.

Despite the increasing frequency of severe weather events, economic concerns currently dominate the list of threats to business continuity. According to the report, 26% of executives view economic uncertainty as the primary risk, representing a rise from 21% in the previous year. Only 20% ranked climate change as their top concern, suggesting a potential misalignment in prioritising immediate economic challenges over long-term environmental risks.

Paul Bantick, Chief Underwriting Officer at Beazley, remarked on this troubling trend, stating, “2024 was characterised by numerous Black Swan weather events – previously once in a lifetime, they are sadly becoming the norm. But our research reveals that executives’ focus is on the uncertainties of the here and now – potentially missing the elephant in the room.” This perspective underlines the critical need for businesses to reconsider their risk management strategies in the face of escalating environmental threats.

Encouragingly, the survey also reflected a decline in concerns related to regulatory complexities and the transition to clean energy; only 19% of the global C-suite identified environmental, social, and governance (ESG) reporting requirements as a top priority. Moreover, 21% cited decarbonising their power supply as their most significant risk currently.

Bantick further highlighted the vital role of the insurance sector in this ongoing transformation, stating, “In this era of accelerating risk, businesses can’t afford to underestimate the impact that climate and environmental risk could have on their business. There is reason to be optimistic however, as 72% of executives are telling us that they are adopting new risk management procedures to better mitigate the impact of extreme weather events.” He added that innovative solutions, such as parametric insurance, could play a key role in helping firms enhance their resilience and preparedness for future challenges.

This report sheds light on the complex dynamics between economic pressures and the urgent need for environmental responsibility, providing a platform for further dialogue and strategy development within the corporate sector.