While business leaders large and small clamor about climate change policies, as evidenced by the blistering number of corporate press releases and business news stories last week devoted to the issue during New York’s Climate Week, they are doing little to protect themselves from the dangers of climate now — extreme weather.
Nearly two-thirds of small businesses do not have an emergency plan in place for their businesses, according to an Ad Council survey. Moreover, 40% of businesses affected by natural or man-made disasters never re-open, an Insurance Information Institute study found.
Disaster disruption to businesses has become so chronic that the U.S. Small Business Administration has even helped create a web site, preparemybusiness.org, to help businesses protect employees, lessen the financial impact of disasters, and re-open more quickly after a disaster.
Jonathan Parfrey, executive director of L.A.-based nonprofit Climate Resolve, which advises businesses and government agencies on climate adaptation issues, says the extreme weather events we are experiencing now are outside normal expectations, taking businesses by surprise, and necessitating a new kind of preparedness.
“It’s disorienting when one of the basic facts of life — weather — goes awry,” he says. “A resilient business is one that understands its vulnerabilities.”
To be sure, business all over the world are more vulnerable now than ever. According to Maplecroft, a UK-based consulting firm, the amount of economic output facing substantial natural hazard risk is set to rise globally. This is because sharp economic growth is occurring in markets that are highly susceptible to natural hazards, such as Bangladesh, India, Indonesia and the Philippines, which all feature as “high risk” in Maplecroft’s Socio-economic Resilience Index. But it’s also because storms have intensified. (2013’s Typhoon Haiyan was the biggest and fastest typhoon ever recorded. The floods in South Asia in early September this year were unprecedented and some of the deadliest in the world’s history.)
Businesses in the United States are among the most susceptible to natural hazards. Indeed, The U.S. ranks second on Maplecroft’s annual Natural Hazards Risk Atlas behind Japan.
Natural hazards pose a $1.2 trillion loss to the economy through 2050, according to a Department of Homeland Security official’s testimony before congress earlier this year.
Whether freak storms in Phoenix, or a longstanding drought in California, or damage from hailstorms in the Midwest (whose annual economic damage now regularly tops $1 billion), extreme weather is risky business.
Last year there were 41 billion-dollar plus extreme weather events around the globe, nine of which occurred in the U.S. And this year both floods and droughts are adding even bigger sums to that tally.
Make no mistake, those whopping losses are tied to business operations.
“Companies engaged in disaster risk reduction will see benefits through greater investor confidence, direct cost savings and improved social license to operate,” says Alyson Warhurst, CEO of Maplecroft.
There are some steps business owners can and should consider to better prepare beyond the scope of what might also be done at home to mitigate the cost of disasters.
As a start, business managers can check out the disaster planning resources the SBA provides, or go to Ready.gov, the Federal Emergency Management Agency’s preparedness web site, for basic information.
There are five areas FEMA recommends businesses focus on:
Program management. Different ways to organize and administer a preparedness program.
Planning. Assessing risks and analyzing methods to prevent hazards.
Implementation. Setting tactics for emergency response, crisis communications, and business continuity.
Training. Testing and evaluating plans — and learning new ones
Improvement. Reviewing plans frequently to make changes and/or make them better.
Understanding that extreme weather is an immediate threat is the first step toward a safer place of work, and business success in the future.
Business that don’t have an emergency plan should put one in place — or face the possibility of having no business at all.
Thomas M. Kostigen is the founder of The Climate Survivalist.com and a New York Times bestselling author and journalist. He is the National Geographic author of “The Extreme Weather Survival Guide: Understand, Prepare, Survive, Recover” and the NG Kids book, “Extreme Weather: Surviving Tornadoes, Tsunamis, Hailstorms, Thundersnow, Hurricanes and More!” Follow him @weathersurvival, or email firstname.lastname@example.org.
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