Businesses are shoring up for resilience in the wake of recent flooding
Resilience is a choice that will combat rising flood risk
The Environment Agency (EA) estimates England needs to invest £1bn annually in flooding and coastal change infrastructure over the next 50 years to prevent the national flood risk increasing significantly as a result of climate change.
The estimate was published as part of the EA’s research into its new national flood and coastal risk management strategy, which it expects to publish in the spring of 2020.
Recent flooding in Yorkshire, and the collapse in March of the Toddbrook Reservoir Dam at Whaley Bridge in Derbyshire, underscore the need for more resilient defences and the devastation that flooding can cause.
How well could your business stand up to a flood event and does it have a detailed emergency response plan it could deploy?
Capital return on flood risk mitigation investment
According to the EA, every pound spent on flood defences prevents around £9 in property damages and wider impacts.
The improvements made to national flood defences may have a beneficial impact on a company’s flood exposure, depending on where it is located. But businesses need to take ownership of their own flood risk and understand it in granular detail, if they want to prevent losses at their premises and mitigate the impact of those that do occur.
By way of example, an FM Global client in the UK had a large flood loss a number of years ago, following a tidal surge. Its entire site was engulfed by water that damaged its commercial premises, equipment and stock.
The one part of the site that remained undamaged was a particularly important facility that had previously been upgraded in line with FM Global recommendations.
Following the loss, the company completed a major upgrade of its entire site to bring every facility in line with this standard of flood resilience.
In addition to pre-loss mitigation activity, it is also important to have a detailed and well-practiced emergency response plan.
FM Global has researched client flood loss experiences and found that those with well-organised flood emergency response plans have nearly 70% less damage, and resume operations sooner than those with either an inadequate or non-existent plan.
Floods result from many different causes and can affect businesses directly and indirectly. Perhaps a month’s rain falls in an afternoon, a river bursts its banks or there is an unusually high tidal surge. Whatever the reason, water flowing into commercial facilities can stop operations, spoil stock, damage property and create health and safety risks.
Even if commercial premises are not impacted directly, damage to local transport, utility and infrastructure networks can wreak havoc on day-to-day operations.
The damage to the Toddbrook Reservoir Dam resulted in around 1,500 people being evacuated and significantly impacted local businesses. There are about 2,800 dams throughout England, Scotland and Wales and many businesses operate in their shadow. A similar event at any of these locations could create significant direct and/or indirect disruption to their operations.
The government’s 2016 National Flood Resilience Review highlighted the threat that flooding poses and stated the percentage of national infrastructure that is located in flood-risk areas. This included:
- 55 percent of water and sewerage pumping stations
- 41 percent of transport and utility infrastructure
- 28 percent of gas infrastructure
- 20 percent of railway lines
- 14 percent of electricity sub-stations
- 10 percent of major roads
To understand their resilience to flooding, businesses need to know how their operations would be affected if one or more of these pieces of infrastructure were flooded. What impact would it have on supplies, deliveries, operational capacity, customers and employees? What mitigation measures would limit the loss?
It is very difficult to calculate and quantify risk to this level of detail, but FM Global has developed detailed flood response guidance and sophisticated predictive analytics tools that give clients the answers they need.
For example, its Global Flood Map uses hydrology and hydraulic science to analyse the flow, speed and force of water and the way it will move and distribute itself through the natural and built up environment.
This scientific approach quantifies the flood risk in any specific location and does not rely on previous loss experience to predict the likely frequency and severity of future events. The Global Flood Map is updated with data collected by FM Global’s 1,900 risk engineers who conduct around 100,000 site visits annually.
The combination of real-life and current data, and sophisticated predictive analytics technology is very powerful. It creates insight that companies can use to quantify their existing flood exposure and to prioritise the risk mitigation measures that will deliver the most value.
Insight from the Global Flood Map can also inform strategic decisions on everything from which locations offer the best option for expansion, to where potential new suppliers are based and how flooding might impact their operations.
Considering flood risk at this level makes it possible to build resilience into existing operations and minimise future exposure to flooding. It is an active choice that companies can make, although not all do.