With Taiwan officially in typhoon season, the question of how cities can best withstand extreme weather is once again on the agenda. For the business community, it raises questions as to how companies can prepare for the worst-case-scenarios.
To combat the effects of climate change, which include increasingly frequent and severe storms and flooding, cities and companies globally are redefining resiliency with multi-pronged strategies. There is clearly a desire to build defences against sea levels that have risen in the past 50 years and are expected to surge even more during this century. This goes hand in hand with a growing recognition that traditional solutions won’t work forever.
According to the United Nations Development Programme (UNDP), natural disasters have affected an average of 220 million people per year over the past two decades. The UN estimates the cost of these disasters at more than $1.3 trillion since 2000, including $380 billion in 2011 alone. Like cities, businesses face immense costs when natural disasters strike: to recover after storms, flooding or other catastrophes, they must ensure that buildings (from factories to facilities and offices) are safe for employees and operations. Depending on a property’s level of preparedness and resources, this can take days, weeks or even months.
Flooding is one of the biggest concerns for cities. A September 2013 Nature Climate Change report looked at the average annual cost of flooding across the world’s 136 largest coastal cities, and found that costs are increasing at a rapid pace. The average cost of urban flooding globally was around $6 billion in 2005. This is expected to rise to $60 billion in 2050 if cities invest in adaptation strategies, and as much as $1 trillion if they do not.
Resilience around the world
Of course, the cost of doing nothing will be even steeper over time. Although it’s not feasible to move the buildings of Manhattan to higher ground, New York is pursuing a $20-billion plan that reinforces existing sea walls and expands surge barriers. The most difficult and costly idea under consideration is a proposed 4,800-foot movable sea wall stretching across the Verrazano Narrows between the boroughs of Brooklyn and Staten Island. But this idea is still in the proposal stage owing to the $6.5 billion price tag.
New York is far from alone in attempting to adjust to climate change threats. For cities that want to learn how their counterparts around the world are adapting to a range of climate threats, the United Nations Office for Disaster Risk Reduction (UNISDR) offers case studies from “role model” cities, such as Kuala Lumpur and Mumbai.
Kuala Lumpur gets 100 inches of annual rainfall, and heavy downpours cause frequent flooding in the city centre and downstream areas. Landslides are also common, albeit minor. The city’s disaster reduction programme has allocated RM2 billion to the construction of the SMART Tunnel, designed to absorb one-third of the floodwater, and another RM140 million for flood retention ponds and high-volume drainage systems. In addition, zoning regulations ensure that schools and hospitals are located away from flood-threatened areas.
Mumbai recognizes 20 discrete vulnerabilities, including inadequate water and sewage coupled with much of its building stock being in a state of imminent collapse. Many of these challenges have not been fully addressed, but Mumbai has taken several steps to mitigate the damage of flooding from heavy rainfall and cyclones. Several of its main rivers have been deepened and widened with the excavation of millions of cubic meters of silt and rock; storm water run-off systems have been desilted and expanded with new pumping stations to discharge stormwater to the sea; flow gauges have been installed upriver to provide early warning of river flooding; and four cyclone mitigation shelters have been built with the help of the World Bank.
What role for business?
Of course, natural disasters can severely impact companies’ operations and negatively affect national GDPs. Drawing on the collective experience of 200 of our client sites affected in Christchurch, Brisbane, Queensland, Japan and Thailand during 2011 has helped us to explore what has worked well for companies in preparation for and during a crisis:
- Preparation. When a hazard warning is issued in advance, convene a crisis management team and consider what can be done to minimize the impact, for example, taping up windows, sandbagging or ordering portable generators. Involve service providers early in the process to ensure critical resources are on stand-by when needed.
- Event. During downtime, when all preparations have been made and yet people are not able to commence recovery efforts, focus should be placed on people’s safety and managing the physical and psychological impacts on staff. Appoint a single point of contact for staff and provide timely updates using all available communications channels, including social media. In the wake of the Christchurch earthquake, extensive damaged to phone lines and mobile phone towers restricted communications. Telstar, a domestic New Zealand telecommunications firm, adopted social media as an effective means to locate and communicate with staff. The last member of staff was successfully located within hours of the disaster.
- Recovery. In the aftermath of the event, the priority is to ensure facilities are safe and/or to identify short-term alternative space. Nominate the corporate real estate team as the “authority” in declaring a facility that is safe to occupy following a disaster.
To truly minimize the risk of business interruption, companies should elevate the importance of business continuity planning (BCP) and integrate disaster resilience within the DNA of their organizational strategy. A truly effective BCP strategy requires a proactive approach, integrating all business components, including your people, processes, technology and facilities. For real estate, this means integrating anticipatory thinking and planning in the wider business strategy at all moments of “change”. This covers each and every step of the real estate lifecycle ranging from initial location decisions, construction projects, workplace transformation all the way to the day-to-day management of facilities
.In the example of the Queensland floods, a large national service provider was able to switch to remote working without interruption by having a strong technology platform in place. In addition to this, prearranged agreements with preferred suppliers for emergency spaces resulted in leased and fully operational space within just two days after being requested.
We recommend that companies opt for back-up sites that are tailored to the specific area. Natural disasters often have an impact well beyond the immediate surroundings so it is important to consider inter-state or offshore location options for back-up operations. The 2011 Japan earthquake triggered multiple disasters (tsunami, nuclear reactor accident and power supply issues) over a widespread area. Boston Scientific, with a regional headquarters in Tokyo, has since revisited their BCP, assuming multiple events and widespread disaster, building a second distribution centre and assigning alternate HQ and customer service centre sites in order for these critical services to resume uninterrupted.
Opening the lens to a global perspective, there is a sense of urgency to create solutions that will make cities more resilient. Corporates, governments and citizens cannot afford the risk of overlooking disaster preparedness, but is it enough?
It is clear that natural disaster preparedness needs to be driven by both city and government authorities, but that the corporate world has a clear responsibility as well, both to work with authorities and to ensure that their own houses are in order.
Cities face many short-term challenges that demand immediate attention, distracting officials from focusing on expensive solutions to long-term problems. Often, it is only when extreme weather events occur, or when threats are imminent, that cities spring into action. Then, they may have the focus and the foresight to bounce forward instead of just bouncing back. In a more perfect world, authorities and the business community would be collectively addressing climate change threats and developing solutions to avoid having to bounce at all.
Author: Jordi Martin is Global Director and Chief Executive Officer of Jones Lang LaSalle’s Corporate Solutions business in Asia Pacific.
Image: Lightening strikes across the sky during a thunderstorm in Guangzhou, Guangdong province, May 17, 2014. REUTERS/Stringer