Resilience is a winning business strategy
By Dale Sands

Tuesday, 30 December 2014

It’s hard to be sustainable if you are not resilient. These two aspects are very interrelated.

Extreme weather events are the second highest of five ranked global risks in terms of likelihood of occurrence, while climate change is the second highest of ranked global risks based on potential impact. While there’s a certain amount of adaptive capacity that we have in our infrastructure to adjust to natural disasters, since 1980 overall financial losses have increased to over $200 billion a year. With 75 percent of these losses uninsured, liabilities fall to the individual or governments to address, so climate adaptation is not really an option, but a requirement that we must consider looking forward.

The U.N. has launched several initiatives beginning with the establishment of the Hyogo Framework in 2005, for which 168 member states were signatories. The Hyogo Framework was established in response to the December 2004 Indian Ocean tsunami that took the lives of over 250,000 souls. This disaster pointed to the need for effective warning systems, emergency response and recovery actions. The U.N. also launched Making My City Resilient Campaign in 2010, and today over 2,000 cities around the world have signed a declaration that they will adhere to the 10 Essentials for resiliency. Ironically, and somewhat embarrassingly, only four cities in the U.S. are signed.

Secretary-General Ban Ki-Moon made the statement that “economic losses from disasters are out of control and can only be reduced with collaboration from the private sector.” With that in view, the Private Sector Advisory Group was formed in 2011 to bring the Private Sector into the discussion with the Public Sector to address disaster risk reduction.

I’ve been working with the United Nations ISDR team for over three years using AECOM’s strong architectural engineering know-how. The PSAG is a group of 70 companies that are committed to disaster resilience. It was through this cooperation that AECOM and IBM collaborated to develop the disaster resilient scorecard on a pro bono basis. The U.N., with AECOM and IBM support, released the scorecard to the public domain in February. Another important initiative launched by the U.N. ISDR this past year is the Disaster Risk-sensitive Investment Program called Project R!SE. Project R!SE is earmarked to raise funding for climate resilient activities.

The Disaster Resilience Scorecard is a quantitative tool based upon the UNISDR’s 10 Essentials . The Scorecard is translated into an 81-character algorithm that may be used to evaluate a city and county’s degree of preparedness in response to natural disasters. Since its deployment, we continue to refine the Scorecard. It’s turning out to be a very useful tool, not to compare one city to another but rather to establish a benchmark of where that city is and what actions they need to take.

About 80 percent of the investment in a city typically comes from the private sector, so the private sector does have a stake in making cities more resilient. We spend a great deal of effort to respond to natural disasters, but we have not done very well as a society to plan response actions to mitigate the impacts of natural disasters. The California Emergency Management Agency found that $1 invested in planning can save $4 to $7 in disaster response cost. It is important to note that not all actions require capital investment to improve resiliency, such as the City and County of San Francisco holding earthquake drills to raise awareness and disaster preparedness.

However, by creating financial incentives for retrofitting buildings, important actions will be taken to further reduce disaster impacts. AECOM has developed an index for what kinds of building materials should be used in contrast to the types of natural disaster threats that the local community may experience, such as high levels of rainfall leading to floods or drought conditions leading to bushfires.

Dale Sands is vice chair of the United Nations’ Private Sector Advisory Group for the International Strategy for Disaster Risk Reduction

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