When nature means business:
A year of record rainfall in the UK puts flooding and property loss prevention firmly in the spotlight
Following a year of record rainfall in the UK, widespread flooding killed nine people, ruined crops and cost the country billions. Governmental policies may seek in the long term to lessen the impact of extreme weather events on society, but this will not happen overnight. For businesses, insurance is only part of the picture in seeking to address this risk. When a major incident takes place, the loss of a key facility can be catastrophic for business, affecting bottom line, market leadership and even share price. Mitigating this growing threat means building resilience into operations, through robust and resourceful planning, with the aim of protecting continuity in the short-term, and, ultimately, assets in the long-term.
The past 12 months were the second wettest on record in the UK. The Met Office says total rainfall for the UK during 2012 was 1,330.7mm (52.4in), just 6.6mm short of the record set in 2000. Few areas escaped the extreme weather, with thousands of homes flooded and farmers struggling to grow crops as a result of the inundations.
If these figures have not got you reaching for your umbrella, this latest analysis might just persuade you. Climate model projections from the Intergovernmental Panel on Climate Change (IPCC) project a much greater tendency for increasing flood risk in the UK, particularly later in the century. And in coastal regions, several global-scale and regional-scale assessments suggest that without adaptation, the UK could experience major impacts on coastal flooding from sea level rise.
The issue of climate change has long been a thorny one. But those doubting the authenticity of reports warning of rising sea levels and irregular deluges remain few and far between.
No major governments deny the existence of climate change, and its impacts are taken seriously by individuals, politicians and businesses alike. With greenhouse gasses in the atmosphere heating the Earth at an increasing pace, the IPCC now estimates that by 2100, average global temperatures will rise by somewhere between 1.1?C and 6.4?C. This may not sound like much, but the IPCC believes even two degrees of warming could decrease crop yields across southern Europe alone by about 20 per cent. It could also lead to the extinction of up to 40 per cent of species on the planet.
The IPCC has calculated that our oceans will rise by between 18 and 59cm by 2100, putting hundreds of millions of people at significant risk of flooding. Later this century, a number of major cities are likely to be under threat to some degree, including New York, London, Shanghai and Tokyo. (Source:Seven Waysto Fix the World, Chris Barnatt, 2012.)
While policy makers and scientists work at ways to limit the risk of climate change, companies must find their own ways to mitigate the immediate impacts. Business continuity management not only provides organisations with the capability to recover from events, but also creates enhanced resilience to smaller events that could turn into more significant events.
The business response to the growing issue of flood risk needs to be flexible and responsive. Plans must have the capacity to adapt to changing contexts, they must withstand sudden shocks and should enable a recovery, while preserving the continuity of operations. These are the three elements as set out by the World Economic Forum in seeking to propose a meaningful definition that encompasses speedy recoverability and adaptability (Source: Global Risks Report 2013, WEF).
Companies at risk must accept and mitigate the reality of longer lasting business disruptions, which means a thorough evaluation of business continuity and crisis management plans, if they have not already done so. An effective and tested emergency response plan will get a company through the initial impacts of major events, as well as addressing the aftermath, taking a company through to complete recovery.
Take the example of a facility located in a known flood zone, where it is not a question of if, but when. Flood damage and disruption is caused by many factors, including contaminated water and the duration of the flood. Immediate actions, for facilities that exist within flood zones should focus on two main strategies, keeping the floodwater out of important buildings where practical, and limiting what gets damaged when water does enter a structure.
Long-term strategies include flood emergency response plans which enable quick (but calculated) reactions during the event. They should also take account of flood events impacting up and down the supply chain.
Looking ahead, the WEF predicts that persistent extreme weather is as significant a threat as terrorism, cyber attack and recurring liquidity crisis for the coming year. Long-term governmental and policy-driven solutions will not address this issue overnight.
While extreme weather events are increasing in occurrence and severity, both the probability and impact of threats and risks can decrease with effective implementation of business continuity and resilience management.