You’ve probably been hearing a lot about climate change and wondering when and if it will impact your business. The good news: at least you are thinking about a plan before it’s too late. The bad news: climate change will affect your bottom line. But don’t fear, there are steps you can take to mitigate your risks. Read on for corporate risk management strategies for climate change.
What Is Climate Change?
Climate change is no longer up for debate. Science has proven that not only is climate change real, it is progressively getting worse. Climate change is caused by a gradual increase in the earth’s atmospheric temperature.
The rising temperature is due to the amount of carbon dioxide trapped in the earth’s atmosphere. These trapped gases cause what is called a “green-house” effect, which raises the Earth’s temperature. This rise in global temperature causes multiple problems, including:
- Higher ocean temperatures
- Rising sea levels
- Diminishing ice sheets
- Retreating glaciers
- More acidity in the ocean
- More extreme rainfall in place and drought in others
Though this change poses risks to all properties, rising sea-levels and increased extreme weather risks are particularly dangerous outcomes.
Should My Company Worry About Climate Change?
Absolutely. Many coastal areas in the US are already experiencing more tidal flooding due to sea level rise. The King Tide or “sunny day flooding” phenomenon pushes sea water deeper inland, at higher levels and for more days per year than ever before. Just ask locals in Savannah, Charleston, Annapolis, Norfolk, Miami, and Boston. Due to rising sea levels, your property’s risk of flooding will increase in the coming years. There are also unseen impacts from rising tides. These include higher coastal groundwater levels, which exacerbate heavy rainfall flooding, because the rainwater cannot be absorbed by supersaturated soils. Also, groundwater that is pushed higher by rising sea levels causes septic systems to fail, leading to sewage overflows and pollution of surface water, local streams and bays.
But even if your company isn’t located near coastal regions, you aren’t without risk. Climate change causes severe storms all across the United States to strengthen with heavier and more prolonged periods of rain. This increases the risk of flooding inland as well.
In short, no matter where your company is located, you need to be worried about climate change and begin taking steps to understand and mitigate your risk factors.
How Can My Company Prepare For Climate Change?
Protect Your Assets
You’ve probably spent a large amount of money on inventory or other proprietary equipment and technologies for your business. You want to have a plan in place to protect your investments in the case of a natural disaster.
Know what natural disasters are most prevalent in your area. Common climate-related disasters include:
- Flooding from heavy rainfall, rivers and streams
- Hurricanes and tropical storms
- Wind and tornados
The fact of the matter is that all natural disasters are getting stronger due to climate change.
Know Your Flooding Risk
Because climate change is causing more flooding than ever before, it’s best to find a company that can provide state-of-the-art, property-level risk assessments for your company’s properties. But where should you turn for information?
You might first reach for the government FEMA flood maps for answers, but these maps are often lacking detailed information or are downright wrong. In fact, certain areas deemed at minimal risk from flooding by the FEMA maps flood multiple times before these maps are finally updated. FEMA flood maps are not holistic, risk assessments on which to base critical corporate investment and operational decisions.
Instead, opt for the B-Resilient(™) Service by Coastal Risk. Their Flood, Natural Hazard and Climate Risk Assessment Report (www.floodscores.com) and their 5-step, resilience acceleration program help commercial property owners, investors and managers control and mitigate risks with best-in-class modeling and flood defense advice. As a result of Coastal Risk’s advice, clients have installed removable flood barriers, elevated critical equipment and made other risk mitigation investments.
More Than Water
When most people think about climate change, images of incredible hurricanes and torrential rains are probably what they are picturing. But climate change is much more than increased tropical events.
Climate change brings with it increased temperatures and increased annual energy costs. Also, increases in temperature and extreme precipitation cause buildings’ windows and roofs, driveways and parking lots and other equipment to deteriorate more quickly. Coastal Risk models the impacts of climate change and provides recommendations on how to mitigate those risks.
Diversify Your Business Practices
You need a plan if a natural disaster strikes your company’s physical location. Ask yourself what will happen if your company’s physical location gets damaged or destroyed.
Make sure to back-up all important information and documents on servers that aren’t located on your physical property. That way, if a disaster damages your company, you’ll still have virtual access to everything you need.
Coastal Risk’s experts can review your company’s emergency response and business continuity plans and provide you with suggestions on how to improve them, including supervision of training and drills.
What Does This Change Doing to Your Assets?
The legal requirements to disclose the impacts of climate change on your business are in a state of flux in the US and in the EU. Investors, fund managers, ratings agencies and regulators are looking more closely at the physical risks of climate change on listed companies. In order to get ahead of this curve, Coastal Risk’s 15-column, portfolio-level, risk screening process can help kick-off your Company’s evaluation of the risks caused by climate change and the steps you are taking to protect your business interests.
What Should I do to Protect my Company?
Taking steps to protect your company from the impacts of climate change can not only save you money, today, but could save your entire business. Steps of protection include:
- Flood barriers – temporary and permanent
- Elevation of electrical equipment and backup generators
- Wind inspection of the roof
- Mitigate wind-driven rain intrusion in windows, lobby doors, etc.
- Landscape changes to redirect stormwater away from building openings
- Review flood and wind damage insurance to determine proper coverage amounts
Climate change is a growing threat to businesses throughout the country and across the world. The time to take action is now, before it’s too late.