The cost of natural disasters has hit $2.5 trillion so far this century, far higher than previously estimated, a UN report said Wednesday, urging companies to face up to the risks.
The study by the UN International Strategy for Disaster Risk Reduction (UNISDR) said the figure, representing only direct losses, was more accurate than traditional tallies.
Most tallies “just represent the picture from internationally-reported disasters, the big disasters which get into the headlines,” said Andrew Maskrey, author of the UNISDR’s latest Global Assessment Report.
“If you add in all the nationally-reported disasters, which don’t get into the international media and the international databases, our impression is that losses are about 50 percent higher than is currently being reported, and losses are going up rapidly,” he said.
Businesses have been outsourcing to disaster-prone locations without taking adequate catastrophe-proofing precautions, a move which could be potentially costly in case of a disaster, he noted.