May 6, 2008 - Some 82% of senior finance and risk managers believe global climate change will require changes to their business models in the years ahead - but few are equipped to adapt, according to a new survey from CME Group, a derivatives exchange, and Storm Exchange, a financial services firm focused on weather risk.

Fifty-nine percent of executives surveyed say the impact of changing weather conditions on their financial performance could be "significant" (38%) or "severe" (21%). Yet most companies appear behind the curve in adapting to the risks posed by today's weather conditions, much less those they see on the horizon. Half of respondents (51%) concede that their companies are not well prepared to cope with current day-to-day economic risks posed by the weather.

In fact, just 42% of respondents say their companies have even attempted to quantify their exposure to the weather, and only 10% have used weather options or futures to hedge that exposure. Of those who have used weather hedging tools, 86% say they found them useful.

So far, energy companies have made the most systematic effort to assess their climate risk. Three in four energy company executives say they have attempted to quantify the impact of weather volatility on their businesses, compared to about a quarter of agriculture and retailing businesses.

"At a time when executives, corporate boards, and regulators are clamoring for a stronger commitment to enterprise risk management, it is becoming unacceptable for a company to pass on the opportunity to measure and manage the risk that weather presents to financial performance," says David Riker, CEO of Storm Exchange.