In the first post of this series, Gina Blus reviewed how an organization can identify which systems or assets are most vulnerable to climate change. Here, she considers how business continuity management (BCM) systems can be used to bolster and build climate resilience. [Part two of a two-part series]
Business continuity management basics
Business Continuity Management is a subset of risk management. It encompasses both the process of identifying the parts of your organization that you can’t afford to lose, and the framework of strategies and measures designed to limit disruptions and enable key activities to resume as quickly as possible after an event. BCM plans are critical to reducing specific threats and to building an organization’s capacity to respond effectively to disruptions. BCM is usually the cornerstone of an organization’s resiliency strategy — a tool to help it withstand stresses and shocks that might threaten its very existence.
Is climate change really a BCM problem?
Business continuity managers have a tough job: every day, they anticipate the ways that cyberthreats, natural disasters, active shooters and industrial accidents could wreak havoc on their employer’s operations. They must figure out how to keep the lights on (literally and figuratively) when a crisis hits, how to protect people, assets and key business processes throughout the event, and what to tell employees, regulators, customers and the public during a disruption and its aftermath. Since a BCM system should already address threats posed by natural disasters like extreme weather, is it really necessary to add climate change as a separate problem to be managed?
In a word, yes. David Honour, editor of the Business Continuity and Resiliency Journal and Continuity Central (UK), summed it up neatly in a blog post titled, “Is climate change a business continuity issue?”:
Every business continuity manager has a duty to assess the risks and to determine the threats to their organization. Business continuity is about the long-term survival of your organisation and climate change may be one of the biggest threats you face.
Honour mentions three specific climate-related risks that might affect an organization: flooding, power supply problems caused by extreme heat, and drought.
Flood risk is addressed in depth in a recent white paper by insurer FMGlobal. Even before the unprecedented and deadly rainfall in Louisiana in August 2016, the dangers were clear, as outlined in “Coping with Extremes: the impact of climate change on extreme precipitation and flooding in the United States and how businesses can prepare now”. The paper explains the science behind the increased risk of flooding, and why previous standards for disaster planning are inadequate. It offers five practical strategies to help organizations withstand flooding and cautions that “a changing climate calls for extra vigilance regarding extreme events” (p. 10).
Beyond BCM: Coping with long-term climate change impacts
Unfortunately, climate-induced disruptions are not limited to flooding, or even just to extreme weather events (which are increasing). Long-term temperature increases have already altered the physical and socioeconomic landscape, with negative consequences for worker productivity, health, resource availability, water quality and even geopolitical stability. So while BCM is a great tool for managing the operational risks posed by climate change for an organization, it’s not all that’s needed.
In the short- and medium-term, climate change will cause some headaches and losses related to extreme weather events for some organizations. Others will find it creates opportunities for new products and services, as well as new collaborations. For almost all, it should trigger a reevaluation of where facilities are sited, which supply-chain partners are preferred, and how resources are used and reused. Long-term, an organization’s ability to cope with climate change and its complex impacts will affect its reputation, business model, and perhaps its viability. For all these reasons, climate change should be on the radar, and in the job description, of every executive and department leader.
Subject matter experts in finance, strategy, planning, facilities, operations, product development and sustainability should all be scanning the horizon for developing climate threats and opportunities, and feeding regular updates into the BCM process.
Companies need to also continually reassess and strengthen their existing climate change and sustainability action plans through programs such as REV’s or other means in order to maximize their investments in energy efficiency, renewable energy, water conservation and waste reduction to make their organizations more resilient. An organization that uses fewer resources to achieve the same outputs as its competitors will be less dependent on its providers, shielded from the impact of any price increases, and more attractive to its stakeholders.
As noted at the outset, a BCM system should build an organization’s capacity to respond effectively to disruptions as well as identify specific risks. In a world with ongoing climate change, that means existing plans should be updated to reflect emerging threats. Even more important, BCM systems should be reviewed to ensure they take a long-term, proactive, strategic approach. In particular, the process should include scenario planning to consider how bigger storms, rising sea levels, increasing temperatures, and other climate impacts might affect the organization’s key activities and priorities.
In The Art of the Long View (1991), Peter Schwartz explained the value of using scenarios: even if the imagined events do not transpire as predicted, considering such possibilities helps managers imagine the decisions they would have to make if they did. He described this as the “liberation of people’s insights.”
To operate in an uncertain world, people needed to be able to reperceive – to question their assumptions about the way the world works, so that they could see the world more clearly. The purpose of scenarios is to help yourself change your view of reality – to match it up more closely with reality as it is, and reality as it is going to be. (p, 9, italics original, emphasis added)
In our uncertain, however-changing world, it behooves all of us to reperceive what’s possible, and to use those insights to reconceive our role and actions.
Gina Blus teaches classes on organizational change, climate law and policy, and greenhouse gas accounting for the Association of Climate Change Officers. She helps organizations assess and address the impacts of climate change on their operations.