The survey of 60 financial institutions from six continents found that these organizations need better access to climate information to enhance their climate change-related risk management.
Just one-third of respondents felt “sufficiently informed” on climate change, according to the report by the SBI and Climate Change Working Group of the UN Environmental Programme Finance Initiative (UNEP FI), sponsored by the German ministry of education and research.
The findings have important implications for business at large, the report said.
“Given that financial institutions are able to influence their clients and investee companies across all sectors of the economy and throughout geographies, they can play a key role in accelerating the implementation of adaptation measures by the private sector more broadly,” the authors said.
Financial institutions surveyed said they often lack information specific enough to their business needs. Over 80 percent of respondents said the type of information they need most is interpretation of the quality of predictions about climate.
While a majority of respondents on all continents said their climate information is insufficient, the proportion was highest among companies operating in Africa (89 percent) and South America (88 percent), and lowest in North America (68 percent) and Europe (56 percent).
Looking at individual sectors, respondents saw the biggest information gap in the chemical and healthcare industries – but the gap was almost constant across all industries, the study said.
Climate change information sources used by financial service providers include in-house research, academic research, consultants, seminars, third-party service providers, trade networks and international organisations, government agencies and the media, the report said. Insurance companies often receive information from associations and reinsurance companies, and the sector has developed its own in-house weather models.
Last autumn four associations on climate change initiatives, representing more than 100 insurance companies and including the UNEP FI, urged world leaders and governments to use insurance-linked products and risk management mechanisms to help developing countries deal with the impact of climate change.
UNEP FI said the insurance industry can play an important role in supporting governments to prioritize adaptation measures, incentivize loss reduction, develop new products to cover emerging risks and raise awareness among many stakeholders.