70% of the SMEs in Thailand have been impacted by climate change, with flooding and rising temperatures affecting 1 in 2 businesses
Thai SMEs are aware of the need to adapt but require support from the insurance industry to do so
The AXA Group and the United Nations Environment Programme Finance Initiative's Principles for Sustainable Insurance (UNEP FI PSI) have published the results of the 1st international study on how SMEs are working to become more resilient to the consequences of climate change.
Now that climate change has become a global reality, how will SMEs adapt to its impact? How will they manage the new economic, social and environmental risks? What are the challenges and obstacles that are slowing down resilient efforts? These are the primary questions raised in this survey with some 1,100 SME directors from major cities in 18 countries across Europe, the Americas and Asia, including Thailand.
In Thailand, the research showed that climate change is particularly a matter of concern for SMEs, as:
70% of SMEs have already been affected in some way by climate change, and more particularly
55% by flooding, 49% by rising temperatures and 36% by extreme weather.
80% of SMEs see climate change as a risk for their business in the short term.
36% say that production processes have been impacted by climate change.
37% are worried that the cost of their insurance will be affected by climate change.
The research also highlighted that as a result of their experience with extreme weather events and flooding, Thai SMEs are aware of the need to adapt but require support from the insurance industry to do so:
38% of SMEs have a plan to deal with climate change and 35% feel "well prepared".
85% believe that businesses should be focusing on adapting to the consequences of climate change rather than preventing it from happening.
78% of Thai SMEs believe that insurance companies should play a role in making people and businesses aware of the potential consequences of climate change.
31% of SMEs say that a main priority for the insurance industry should be incentivizing companies to plan and prepare for the consequences of climate change.
"This report shows that the emerging markets and particularly Thailand are most concerned by the impacts of climate change", said Mrs. Saifon Sutchasila, Chief Marketing Officer of Krungthai-AXA Life Insurance Public Company Limited.
"It also tells us that for a resilience strategy to be successful, it needs to combine both mitigation and adaptation at all levels: global, national and local. At Krungthai-AXA Life Insurance, we are confident that the insurance industry has the opportunity to instigate behavioural change through raising awareness and incentivising adaptation, to create stronger, healthier and more efficient communities and businesses. Together with AXA General Insurance in Thailand, we are committed to playing our role and becoming a partner in the global effort to develop resilience to climate change."
Miss Maneenuch Kongarchapatara, Chief Marketing Officer, AXA General Insurance said that "SME's are the core of the Thai economy and are certainly prone to natural disasters and the impact of global climate change. For example following the major flooding in 2011 many SME's had to close down and several have not yet fully recovered. Providing a natural disaster risk plan for SME's in Thailand is an extremely important task for AXA and one we take extremely seriously. Even though the level of risk for SMEs, particularly smaller SMEs is quite minimal, AXA can still provide support in managing their production processes, reserve funds and evacuation plans which would greatly reduce the impact of future natural disasters."
Krungthai AXA Life Insurance continues to be a thought leader on climate change and this is underlined through our Disaster Risk Reduction programme in partnership with CARE Thailand, our Waste Water management programme in Lopuri Province and our ongoing environmental awareness programmes throughout our organisation.