How can businesses play a larger role in building resilience?

Resilience is often at the fore of public sector conversations, and rightfully so. Looking towards the private sector, how can businesses play a larger role in building resilience against climate-related disasters?

On March 5, Karp Strategies’ Graduate Associates Yuri Chang and Cheryl Lim attended a discussion on disaster risk reduction led by Chloe Demrovsky, President of Disaster Institute International and hosted by NYU Wagner’s School of Public Policy.

90% of all naturally-induced disasters are climate-related, Demrovsky explained, and every dollar spent on disaster risk reduction prevents $5 to 10 in economic losses related to disasters. Though businesses are large contributors to climate change, they can also be a part of the solution. Companies are increasingly building new facilities and offices with resilient designs, and have partnered with disaster relief agencies to ensure that critical infrastructure such as supply chain operations, along with neighborhood services such as pharmacies and ATMs are back up and running soon after natural disasters strike. She also made the case that private sector investment in resilient infrastructure would better ensure employees’ safety and ability to work.

Properly accounting for the physical risks of climate change could shave off more than 4% of companies’ market values, according to a study conducted by Schroders that looked at over 10,000 companies globally. The study calculated what businesses would have to pay to insure their physical assets against hazards caused by rising global temperatures and weather disruption.

Still, when disasters strike, companies too often consider the consequences as a one-time, non-repeating expense. As natural disasters become more and more frequent, companies will need to incorporate resiliency into their overall business strategies. Demrovsky argued that government should create a disaster risk reduction framework that businesses would actually respond to. While scientific discourse often focuses on the long-term risks of climate change, Demrovsky suggested that government agencies focus on short-term risks and actions to incentivize private sector action.

The discussion raised the importance of establishing a diverse, multi-sector coalition of committed stakeholders to address disaster risk and building resilience. Karp Strategies will continue striving towards these exact efforts, and keep a finger on the pulse on resiliency-related issues. We invite you to join us for future learning and professional development opportunities. If you’re interested, please drop us a line!