According to a report released by the National Climate Data Center (NCDC), national weather and climate-related disaster damages totaled nearly $110 billion in 2012, the second-costliest year for natural disasters since 1980. At least $1 billion in damages resulted from each of the eleven 2012 natural disasters, including spring tornado outbreaks, a derecho (a long-lived wind storm), a year-long drought, associated heat waves, and wildfires.
“What we are seeing this year (2012), is not just an anomalous year, but a harbinger of things to come", said Jane Lubchenco, National Oceanic and Atmospheric Administration administrator. Globally, the cost of disasters is also rising. The World Bank's Independent Evaluation Group (IEG) has revealed that disaster’s costs are 15 times higher than they were in the1950s.
According to statistics, the volatility and cost implications of disasters continue to rise. Natural disaster experts suggest a two-prong approach to combat natural disaster-related circumstances: adaptation and mitigation. In the corporate world, the two concepts must be intertwined. Adaptation refers to the necessary modifications that account for a changing environment. Adaptation is necessary for the survival of a species, as well as a business.
Increasing disaster costs require changes in overall preparedness perceptions and tangible actions. Corporate leadership teams must set the tone for preparedness by financially supporting, authorizing, and directing senior management to institute dedicated and sustaining emergency preparedness measures. Through these efforts, businesses can proactively respond to identified threats, potential risks, and potential disaster expenditures.
Initialization of corporate preparedness and prioritizing response planning is the foundation of private sector disaster adaptation. However, pre-emptive mitigation efforts are crucial to preventing incidents and minimizing costly impacts. Hazard mitigation is the effort to reduce loss of life and property by lessening the potential occurrence and overall impact of an incident. The mitigation process ideally requires the implementation of preventative measure before the next disaster, crisis situation, or even regulatory inspection. There are costs associated with analyzing threats, reducing risks, and implementing mitigation measures. However, an investment in the long-term well being of a facility and/or company through planned mitigation actions can increase overall site safety, operational sustainability, and financial security.
Effective mitigation requires a thorough understanding of the potential risks, regulatory compliance, lessons learned, and operational goals. For optimal financial benefit, mitigation efforts should meet certain key operational and response objectives. Mitigation efforts should lessen the strategic cost of an incident, and reduce the tactical effort of regulatory compliance. Mitigation efforts may:
- Reduce incidents
- Improve the ability to respond to safety incidents
- Improve the casualty and harm conditions through faster rescues and accident avoidance
- Strengthen infrastructure against failure
- Improve corporate reputation through intent and safety investment
- Reduce downtime
- Improve asset utilization
- Solidify supply chain availability
Mitigation measures can also be incorporated into corporate and site-specific response planning. Ensuring that response plans incorporate current communication methods, technologies, and lessons learned can improve over functionality of the response plan. Mitigation measures may include, but are not limited to:
- Automating response planning through tracking, updating, and management
- Facilitating universal ability to update response plans across all locations through cloud technology
- Automating core compliance and response planning activities
- Reducing resources associated with compliance and safety
- Enabling EHS personnel to spend more time planning and less time complying and reporting
- Automating governance and controls
- Optimizing and coordinating drills and actual emergency responses
To encourage continual adaptation and mitigation, preparedness programs should be reviewed at least annually. Response plans may require adjustments to incorporate operational changes, employee turnover, and/or new company policies, as well as changes in threat levels and associated risks. Through corporate preparedness adaptation and proactive mitigation efforts, safety and planning shortcomings, response coordination opportunities, resource capabilities, and effective response processes can be identified, improving overall site safety, financial security, and operational self- reliance.