2008 • 2009
Twenty DOLLARS
GUIDE
13TH ANNUAL
DISASTER RESOURCE
PLANNING & MANAGEMENT • HUMAN CONCERNS • INFORMATION availability & Security
T elecom & S atcom • FAC I L I T Y I S S U E S • C R I S I S C O M M U N I C AT I O N S & R E S P O N S E
plan n i n g & m a n ag e m e n t
Stormy Weather –
Business Continuity & Climate Change
By Regina phelps
46
DISASTER RESOURCE GUIDE 2 0 0 8 / 2 0 0 9
Climate change – it’s
almost impossible to pick
The city of Pisco in western Peru was
almost totally destroyed, and 595
people were killed in this magnitude
Annual
Greenhouse Gas Emissions by Sector
8 earthquake.
up a newspaper, magazine, or journal without
seeing at least one article
Residential, commercial,
& other sources 4.8%
Land use and biomass
burning 10%
Land use and biomass
burning 6.6%
Power Stations 21.3%
Agricultural byproducts
40%
Fossil fuel retrieval,
processing,
& distribution 29.6%
Fossil fuel retrieval,
processing,
& distribution 11.3%
Agricultural
byproducts 12.5%
Methane
(18% of Total)
Transportation Fuels 14%
wouldn’t have been the
case. Why the sudden
Fossil fuel retrieval,
processing,
& distribution 8.4%
change? Was it Al Gore?
Transportation Fuels 1.5%
Residential, commercial,
& other sources 2.3%
Land use and biomass
burning 9.1%
Industrial Processes 5.9%
Land use and biomass
burning 26%
Residential, commercial,
& other sources 12.9%
venient Truth? Was it the
26%
Power Stations 1.1%
Power Stations 29.5%
Was it the movie, An Incon-
9%
Waste disposal
& treatment 18.1%
Industrial Processes 16.8%
couple of years ago, this
polar bear being designat-
Waste disposal
& treatment 3.4%
Residential, commercial,
& other sources 10.3%
on the topic. Even just a
Insured
US$ 30b
Agricultural byproducts
62%
Transportation Fuels
19.2%
Industrial Processes 20.6%
Carbon Dioxide
(72% of Total)
Nitrous Oxide
Percent
worldw
(9% of Total)
ed a threatened species?
The answer is that it was
all of the above.
Fact or Fiction?
Overwhelmingly, the scientific community believes that climate change
is upon us. Where the debate seems to
have stalled is regarding the actual cause
of this change. Natural planetary cycles?
Man’s destructive impacts? Some combination of the two? Interesting though
this debate may be, as continuity planners, we shouldn’t get “hung up” on
the cause, we must focus our attention
instead on the effects of climate change,
and to develop plans to mitigate, prepare, respond, and recover.
Definitions
It is important to start with a few basic
definitions.
Climate change is simply the variation in the Earth’s global climate, or in
regional climates over time. It involves
changes in the average state of the
atmosphere over time, ranging from
decades to millions of years. Climate
is impacted by the dynamic processes
on Earth, external forces (including
variations in sunlight intensity) and,
more recently, by human activities.
Greenhouse Gases (GHGs) are the
components of the atmosphere that
contribute to the greenhouse effect.
GHGs are essential for our survival –
without their effects, the Earth would
be uninhabitable. In the absence of
GHGs, the mean temperature of the
earth would be about -19 °C.
GHGs come from a variety of natural
sources, and from human activity. In
the order of relative abundance they
include: water vapor, carbon dioxide,
methane, nitrous oxide, and ozone.
Number of natural catastrophes 1980–2007
1,000
800
An Increase in Natural Disasters
Munich Re (the world’s second largest reinsurance company) reported that
2007 had the most natural disasters
– 960 incidents – since it began keeping such records in 1974.¹ In 2006, it
recorded 850 incidents. These natural
disasters included earthquakes, tsunamis, windstorms, floods and extreme
temperature events (e.g., heat waves,
wildfires), mass movement (i.e., avalanches, landslides), and hurricanes.
Overall losses exceeded $83 billion
USD – that’s billion with a ‘B.’ Some of
600
400
200
the worst events are listed below:
January 2007: Storm Kyrill
This storm affected large parts of
Northern and Western Europe. It produced hurricane-force winds, resulting
in insured losses of about $5.8B USD,
and total economic losses of approximately $10B USD.
June – July 2007: Flooding in the UK
Geophysical e
Earthquake, v
Widespread flooding occurred in Great
Britain over a two-month period. It led
to insured losses of about $3B USD, and
total economic losses of $4B USD.
Meteorologica
Tropical storm
July – November 2007: South Asia Flooding
The floods that lasted over five months
severe weathe
created a huge amount of human suffering. Over 20 million people were
tornado, local
displaced. This resulted in well over
6,600 deaths and economic losses of
$1B USD.
October 2007: California Wildfires
Hydrological e
Storm surge, r
flash flood, ma
(landslide)
Southern California is no stranger to
disaster, particularly wildfires. The fires
in the fall of 2007 caused the largest
evacuation in the state’s history. Over
410,000 acres burned, and more than
2,100 structures were destroyed. The
insured losses were at least $1.9B.
continued on page 48
www.disaster-resource.com
Climatologica
47
Freeze, wildla
previous years.
previous years.
5% 5%
8 earthquake.
US$ 30bn
9%
– Flood losses accounted for 26% of
plan
n i naccounted
g & m a n ag
m e noft
– Flood
losses
fore26%
the insured losses, which was far
the insured losses, which was far
above the long-term average of 7%.
above thecontinued
long-term average ofpage
7%.
This was due to the two from
floods in the 47
This was due to the two floods in the
United Kingdom in June and July,
United Kingdom in June and July,
with a total insured loss of US$ 6bn.
with a total insured loss of US$ 6bn.
40%
40%
50%
50%
Percentage distribution
Percentage distribution
worldwide
– At continental level, the loss impact
worldwide
– At continental level, the loss impact
was most severe Number
in Europe,
where
of natural
catastrophes 1980–2007
was most severe in Europe, where
Overall losses: US$ 82bn
almost
half
of
all
insured
losses
960
ss almost half of all insured
Overall losses: US$ 82bn
960 events
events
losses
1,000
were incurred – roughly
US$ 13bn.
8%
were incurred – roughly9%
US$ 13bn.
9%
8%
It is also noticeable that9%
Australia/
9%
19%
verall
It is also noticeable that Australia/
19%
verall
Natural Disasters 2007
accounted800for 7% of the
geOceania
of
Oceania
accounted for 7% of the
ge
of
(US$ 1.8bn), which was much
estlosses
losses (US$ 1.8bn), which was much
est
higher
than
the average
of the last
600
arthhigher than the average of the last
arth10 years (1.5%). This was primarily
erall
10 years (1.5%). This was primarily
erall
due to the hail events
400 in Canberra in
45%
45%
due to the hail events
in Canberra in
February and Sydney
in December
37%
ost
37% in December
ostFebruary and Sydney
and
to
the
windstorms
and
fl
oods
200
e in
in
and to the windstorms
and floods
e
that hit New South Wales
in June.
Percentage
distribution
Percentage
distribution
in June.
-- that hit New South Wales
worldwide
30.
worldwide
0
30.
1980
1988
45%
45%
Percentage distribution
Percentage distribution
worldwide
worldwide
1992
16,000
16,000 fatalities
fatalities
tt to
to
5% 5%
5%
5%
of
of
ar
ar
7%.
7%.
n
n the
the
uly,
uly,
6bn.
6bn.
pact
pact
ere
ere
007
ss007
3bn.
3bn.
ia/
ia/
e
e
much
much
ast
ast
arily
arily
rra
rra in
in
ber
ber
ds
ds
ne.
ne.
1984
28%
28%
40%
40%
1996
2000
Insured losses:
Insured losses:
US$ 30bn
US$ 30bn
3%
9%
3%
9%
2004
3%
26%
power companies away from plants that
emit high levels of carbon dioxide and
focus on new, cleaner and renewable
technologies. (The principles do not,
however, strictly prevent any of the
banks from financing the plants.)
62%
Percentage distribution
worldwide
Geophysical events
Earthquake, volcanic eruption
Meteorological events
Tropical storm, winter storm,
severe weather event, hail,
tornado, local storms
7. Physical
Hydrological events
Storm surge, river flood,
flash flood, mass movement
(landslide)
Climatological events
Freeze, wildland fire,
drought
Ten-year mean
Munich Re Topics Geo 2007
45
26%
26%
50%
50%
62%
62%
Percentage distribution
Percentage distribution
worldwide
worldwide
Percentage distribution
distribution
Percentage
worldwide
worldwide
Overall
Overall losses:
losses: US$
US$ 82bn
82bn
8%
8%
Geophysical events
Geophysical events
19%
19%
Earthquake, volcanic eruption
due to increased costs or lack of availWhat are the Effects
of Climate
Earthquake, volcanic eruption
able raw materials?
Change on Business?
Meteorological events
Meteorological events
Tropical storm, winter storm,
28%
storm, winter storm,
28%
3. Product and technology risks
Climate
change presents veryTropical
different
severe
weather event, hail,
severe weather event, hail,
local storms
problems than we normally tornado,
face
–
in
tornado, local storms Some companies will do better than
Hydrological
events others in a carbon-constrained world.
many ways, it resembles
an
influenza
45%
Hydrological events
45%
Storm surge, river flood,
Storm
surge,
river flood,
Some will be able to minimize their risk
pandemic.
The
three
key
effects
include:
Percentage distribution
distribution
flash flood, mass movement
Percentage
flash flood, mass movement
worldwide
worldwideis global – we (landslide)
by creating “climate-friendly” products
The impact
will
all
go
(landslide)
Climatological
events
and services. This is already becoming a
throughInsured
this
together;
however,
some
Climatological events
Insured losses:
losses:
Freeze, wildland fire,
US$suffer
30bn
Freeze, wildland fire, common theme in advertising and the
US$
30bn
areas will
more than others.
drought
3%
9%
3%is long-termdrought
9%
framing of products and services.
The
problem
– it will
Ten-year mean
1996
2000
2004
1996 not resolve
2000
2004
quickly,
if ever. Ten-year mean
4. Litigation
45
Munich Re Topics Geo 2007
45
Munich Re Topics Geo 2007
The harm may be irreversible.
Companies
that create large amounts of
26%
26%
GHGs
will
likely see litigation in the
Seven Risks of Climate Change
future
reminiscent
of asbestos, tobacco,
62%
There are seven risks 62%
to business associand
even
the
fast-food
industry.
Percentage
distribution
Percentage
distribution
ated with
climate
change.²
worldwide
worldwide
1. Regulatory
The impact is likely in two ways:
Geophysical
Geophysical
events
•There
willevents
be regulation on emissions
Earthquake,
Earthquake, volcanic
volcanic eruption
eruption
of products (i.e., lawnmower or car
Meteorological events
events
Meteorological
emissions).
Tropical
Tropical storm,
storm, winter
winter storm,
storm,
severe
severe weather
weather event,
event,
hail,
•Regulation
on hail,
the manufacturing
tornado,
local
storms
tornado, local storms
process
used to create products.
2.
Hydrological events
events
Hydrological
Storm surge,
surge,
river fl
flood,
ood,
Supply
chain
Storm
river
flash
ash fl
flood,
ood, mass
mass movement
movement
fl
(landslide)
(landslide)
Every company will need to assess their
supply
chain in relationship to climate
Climatological
Climatological events
events
change.
Freeze, wildland
wildland fi
fire,
re,
Freeze,
drought
drought
•Are any of your suppliers vulnerable
mean
toTen-year
regulation?
Ten-year
mean
45
Munich will
Re Topics
Topics
Geo
2007increased
•What
beGeo
the
cost to
45
Munich
Re
2007
suppliers to comply with regulations?
•Will your supplier network be unable
to continue to supply you products
48
DISASTER RESOURCE GUIDE 2 0 0 8 / 2 0 0 9
5. Reputation
Companies who do not embrace a more
carbon-neutral business model will likely
be judged in the court of public opinion.
This will have impacts on consumer
choices and investment opportunities.
6. Financial
Three of the nation’s largest investment
banks have developed new environmental standards to help lenders evaluate
risks associated with investments in
coal-fired power plants. Citibank, JP
Morgan Chase, and Morgan Stanley
issued “Carbon Principles” (February
4, 2008), making it more difficult for
coal plants to secure financing. The
focus of the principles will be to steer
Continuity planners will have their
work cut out for them when addressing
the plethora of physical risks associated
with climate change.
•Flooding – 100-year floods happening
more often
•Droughts – for protracted periods of
time and in larger areas, which will
lead to an overall decrease in potable
water in more places
•Extreme heat – potential power outages and brown-outs
•Extreme winter cold – natural gas
shortages
•Hurricanes, tornados, windstorms –
more frequent, and stronger
•Crop failures – impacting agricultural
production
•Decrease in fish populations
•Famine – which destabilizes countries
and regions, which increases population displacement, which causes
widespread migrations, which lead to
border tensions
•Insect infestation
•Increase in diseases and epidemics
•Spread of “unusual illnesses” – such
as ‘Chikungunya,’ a mosquito-borne
disease which had previously been
seen only in Asia and Africa, and
is now being found in Europe, and
malaria spreading into “non-malaria”
locations
•Rising sea levels across the globe,
which will impact some of the largest
cities in the world, including:
Bangkok
Guangzhou
Hong Kong
Kolkata (Calcutta), India
London
Miami
Mumbai
New York
Shanghai
Tianjin (China)
Tokyo
•National security – in a study released
in April, 2007, climate change overall
continued on page 50
plan n i n g & m a n ag e m e n t
continued from page 48
is “perceived as a threat to national
security,” by the U.S. Military
Climate Change Strategies
Quantify the company’s carbon footprint
Before you can really develop a program to reduce GHGs, you need to
know where your company currently
stands. This involves understanding the
source and level of GHGs, which will
need to be tracked over time to get the
whole picture, and also to be able to
note improvements over time. This
tracking and examination will likely
lead to heightened awareness, with
the possibility of cascading benefits to
all involved. This process will expose
broader risks and overall opportunities.
Assess risks and opportunities
What are the risks and opportunities to
What we do as a profession best is to plan for
those things that no one
ever wants to happen.
the business? Once you have a handle on
your carbon footprint, you can begin to
understand both the direct and indirect
impact to your business. Now you have
the opportunity to think strategically
about the seven risks to your business.
You have begun to explore what may
hurt the business and what will provide
opportunities to the business.
Adaptive in response
Armed with a good understanding of
the big picture, adaptive response strategies can be developed, reviewed, and
adopted. This is, of course, where emergency managers and BCP professionals
excel, taking us back to the core aspects
of our work: mitigation, preparedness,
response, and recovery.
•Mitigation – What can be done to
minimize projected losses? This could
include changing business locations
for mission-critical processes, procuring new equipment, or adapting
50
DISASTER RESOURCE GUIDE 2 0 0 8 / 2 0 0 9
existing equipment to meet the new
challenge.
•Preparedness – What can be done
to prepare staff and facilities? This
includes developing plans and processes for new risks, educating and
training staff, building awareness,
and conducting exercises.
•Response – Develop appropriate
response plans based on findings and
analysis.
•Recovery – Reassess BCPs based on
above. What needs to be changed or
added to recovery plans to meet the
new risks?
What Does This Mean Going Forward?
Climate change will be viewed as a significant risk going forward.
How can emergency managers and
BCP professionals stay ahead of the
curve? Begin by reviewing your current
risk assessment and hazard analysis for
new risks or changes in existing risks.
Then go back and look at your Business
Impact Analysis (BIA) and note if any
mission-critical functions have greater
exposures or are at a heightened risk.
Then assess each business continuity
plan and your overall disaster recovery
plan in view of your findings.
Always go back to industry touchstones and ask yourself what can be done
in the areas of mitigation, preparedness,
response, and recovery to better position and protect the company.
Now What?
What we do as a profession best is to
plan for those things that no one ever
wants to happen. Emergency managers
and Business Continuity professionals have a unique opportunity to be
forward thinking regarding climate
change. Don’t put your head in the sand
and pretend it isn’t happening. Be bold,
open, and innovative in your thinking
and planning.
About the Author
Regina Phelps is an internationally recognized
expert in the field of emergency management and contingency planning. With over 26
years of experience, she has provided consultation and speaking services to clients
on four continents. She can be reached at
regina@ems-solutionsinc.com.
What can you
personally do about
climate change?
•Understand the
consequences of your
daily choices.
•Consider low-carbon
products and a
low-carbon lifestyle.
•Consider low-carbon
investments in your
home: insulation,
solar, etc.
•Buy recycled products.
•Practice the three
R’s – Reduce, Reuse,
Recycle.
References
¹Münchener Rückversicherungs-Gesellschaft,
2008.
²Competitive Advantage on a Warming Planet,
by Jonathan Lash and Fred Wellington, Harvard Business Review, March 2007.