These findings are the result of a survey of 205 senior finance and risk managers, at companies in weather-sensitive industries, commissioned by CME Group, a derivatives exchange, and Storm Exchange, Inc., a weather risk management originator.

The study also found that 42 percent of those surveyed said their companies have attempted to quantify their exposure to the weather, and only 10 percent had used weather options or futures to hedge that exposure. However, of those respondents who said their companies have used weather hedging tools, 86 percent said they found them useful.

Fifth-nine percent of senior finance and risk management executives said their companies' exposure to risks stemming from weather volatility meant that the impact on their financial performance could be "significant" (38 percent) or "severe" (21 percent) and that they need protection from it.

Companies in a wide range of industries often point to adverse weather conditions for their failure to meet sales and profit targets. Forty-three percent of energy and agricultural companies surveyed said the weather has become more volatile in recent years. However, executives in the retail industry were less attuned to increased weather volatility.

A large part of the slow adoption of weather hedging among companies that are so clearly impacted by the weather is unfamiliarity with the weather risk marketplace. Fully 45 percent of those surveyed said they did not think there were any effective or cost-effective ways to manage weather risk.

"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," said David Riker, CEO of Storm Exchange.

Major findings of the study were released at the Risk and Insurance Management Society 2008 Annual Conference & Exhibition. An in-depth research report will be made available in May.