Risk and Extreme Weather Preparedness: Are You Ready?
Among the many emerging areas for risk assessment, as we navigate our increasingly complex and interconnected world, is a company’s exposure to extreme weather events. These events are occurring with greater frequency (witness the North American Midwest experiencing “100-year floods” roughly every other year in the past 10 years) and we should expect that trend to continue and even amplify, as the cascade of inter-related events driven by climate change accelerates.
Exposure to extreme weather events is not limited to natural disasters, although hurricanes are without question posing greater and greater risks to coastal and intracoastal industrial, manufacturing, transportation, and logistics activities. 2018 saw massive devastation and business interruptions caused by wildfires in the West, including the first climate-related bankruptcy when PG&E filed for protection. Despite the increasing tempo of these events, many companies have not completed a full assessment of these risks to their business.
Lynda Henry, Senior Treasury Manager at Blackbaud, Inc., shared with us the rigor her Charleston-based company has developed over the past 4 years, as they have had to evacuate 4 of the last 4 years for meaningful periods of time as Charleston experienced hurricane-driven flooding and evacuation orders. In Lynda’s case, Treasury had a significant role establishing and implementing the protocol for the evacuations and also manages follow up with insurers and other providers. Blackbaud has had to learn from each event and re-calibrate the approach to address the myriad details entailed when the Risk Committee determines an evacuation is warranted, not least of which is what the evacuation site should be. As Lynda explains, “Each hurricane track has changed several times as it approached Charleston. For Dorian just last week, we were planning to evacuate to Raleigh, but in the end the hurricane headed there too, so we ended up in Atlanta.” To read more about Blackbaud’s process, contact wpinet@sycamoreassociates.com. And watch this space as we devote more time to risk assessments, planning, and how to integrate these risk profiles into your business process.