Strategic Intelligence for CFOs, Finance Directors, Controllers and Treasurers in Asia  | 
2010, Sep 10

Global Warming: Winners and Losers in Asia

Home > Features > Global Warming: Winners and Losers in Asia
Features

Global Warming: Winners and Losers in Asia

by Angie Mak, 29 December 2009

Recent warnings sounded at the Copenhagen Climate Change Conference highlighted the severity of global warming’s effects on various communities, including businesses around the world. For many, climate change can put property and other physical assets at risk, particularly those situated near shorelines and in locations vulnerable to typhoons and flooding. Other companies may see sharply higher liability for causing damage to the environment and other perceived sins, and suffer as well from investor, bank credit and employee flight.

 
But while there are losers, global warming can also create potential winners. Most obvious are companies in alternative energy, such as wind power, natural gas, solar cells and other ‘green’ technologies. The dredging and reclamation industry, though niche, is also now in high demand. Flemish dredging companies Deme and Jan De Nul, having led projects on the coasts of Dubai and Abu Dhabi, are being consulted for reclaiming coastlines in threatened areas, such as Brussels.
 
Other industries that could see a demand for their services include those in insurance and carbon trading, says Stephen Tsang, senior project officer at the University of Hong Kong’s environmental and sustainability research arm, the Kadoorie Institute.
 
Here’s a look at the ways climate change can affect businesses and industries, both positively and adversely, and how the potential losers can mitigate the downside and even turn their fortunes around.
 
Winning With Insurance
Weather insurance is common in the U.S. While the product has a bigger market amongst the agricultural industry in Asia, it is only now that insurance providers are increasingly recognising the opportunities to offer businesses a way to mitigate or pass on weather-damage risk.
 
Providers currently offering such protection services include HSBC, through its real estate insurance in the UK, and Tokio Marine Newa in Taiwan, which covers typhoons. Meanwhile, Japan-based Mitsui Sumitomo Insurance handles weather derivatives. 
 
Other risk plans offer a green theme. For example, the Fireman’s Fund (a subsidiary of Allianz) in the U.S. offers ‘green upgrade coverage’ for commercial buildings. The policy covers rebuilding and replacements with specific non-toxic paint and insulation installation. Should the building be destroyed, coverage includes rebuilding to certified green standards.  
 
Insurance companies can win from higher sales and premiums, provided they correctly gauge the risks and insurability of the businesses they choose to protect. What about the companies buying climate-change insurance products?
 
They can win, too, so long as they know exactly what they’re buying. The small print in basic coverage plans for businesses rarely cover climate-change events. For example, Hang Seng’s generic Office Protection Plan clearly excludes damage caused exposure to weather conditions. For risks related to climate change, a separate insurance plan may be needed altogether.
 
Leaky Ceilings
Global warming is blamed for unusually strong typhoons and other extreme weather conditions. They can cause structural damage to buildings, especially older properties. Even a leaky ceiling, progressing to indoor flooding, can be detrimental to manufacturing equipment, data and IT systems, and other office equipment.
 
1234next ›last »


Related articles

Accounting and Regulations

CFO innovation Asia Accounting and Regulation the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Accounting Regulation, IFRS, US GAAP, Tax, investor relations, corporate governance, Corporate Law, Financial Regulators, Internal Audit, Audit, Corporate Law.
Auditing, Investor Relations, Law and Compliance, Tax

Finance and Banking

CFO innovation Asia, Finance and Banking the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Corporate Finance, trade finance, treasury and risk management, capital expenditure, Banking, mergers and acquisitions
Cash and Liquidity Management, Corporate Finance, Insurance, Treasury Management

Management

CFO innovation Asia the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Finance Management, Corporate Governance, Human Resource Management, Compensation and Benefits, Mergers and Acquisitions, Professional Development, Corporate Real Estate, Risk Management, Budgeting and Forecasting, Business Process Management, Business Process Reengineering, Outsourcing.
Budgeting and Planning, Business Expense Management, Human Capital Management, Outsourcing and Shared Services, Risk Management

Metrics

Corporates, Financial Services

Technology

CFO innovation Asia Technology the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Finance Systems, Business Intelligence, EPR, Accounting software, CRM, Cloud Computing, Telecommunications, Business Process Outsourcing, Business Process Management Software.
Business Intelligence, Enterprise Software and Systems, Financial Systems, Security