Governments and business should engage to curb risk

The private sector is responsible for the lion's share of investment, meaning that risk-sensitive approaches are critical to prevent disasters
The private sector is responsible for the lion's share of investment, meaning that risk-sensitive approaches are critical to prevent disasters

CANCUN, Mexico, 25 May 2017 – Businesses and the authorities need to work hand in hand to prevent natural and human-induced hazards from sparking disasters, a top international conference has heard.

Participants at the 2017 Global Platform for Disaster Risk Reduction have this week put the spotlight on engagement between the private and public sector as part of a collective effort to build resilience.

“The most vulnerable part of our communities is not the big infrastructure. It’s the homes and the small businesses,” said Mr. Aris Papadopoulos, a board member of the UNISDR Private Sector Alliance for Disaster Resilient Societies, which is known for short as ARISE.

“Unless we engage the people who are creating the risk, we cannot make progress. We need to bring them into this discussion before disaster strike,” said Mr. Papadopoulos, former chief of construction materials group Titan America and founder of the Resilience Action Fund.

The Mexican-hosted Global Platform has drawn around 4,000 delegates – from governments, the private sector, community organizations and other groups – from more than 180 countries.

The biennial Global Platform is taking stock of efforts to implement the Sendai Framework for Disaster Risk Reduction, a 15-year agreement adopted by the international community in 2015.

While the Sendai Framework puts the onus on governments to bring about change, it is relatively unusual in the world of international agreements because it also says that other players have a specific role, with the private sector one of those singled out.

ARISE was created in November 2015. It aims to leverage business resilience know-how and encourage investment decisions that take disaster risk into account, in order to help the private sector to play its role in implementing the Sendai Framework.

A focus on the private sector is crucial, given that global disaster losses have swollen to an estimated US$520 billion a year owing to factors including climate change, rapid urbanization and the expected growth of risk-exposed assets. This growth in risky investments is often due to a lack of adequately costing disaster risk, coupled with high profit margins for investments in many areas exposed to earthquakes, tsunamis, storm surges, floods and other hazards.

In the event of a disaster, the cascading impacts result in losses far beyond that of the principal investor. The resilience of businesses is critical – whether they are one-person operations or multinationals whose supply chain disruptions can sow global havoc – notably because the private sector is responsible for 75 percent of investment in infrastructure. In addition, resilient businesses are a core element of resilient communities.

“A vast amount of investment comes from the private sector, so they can do a lot themselves to be more resilient,” said Ms. Chloe Demrovsky, Executive Director of the Disaster Recovery Institute International.

ARISE, which has 140 member organisations to date, also aims to help small- and medium-sized enterprises reduce their risk. That is a critical factor for resilient societies, given that such firms account for over 80 percent of employment.

“We need everybody on board, not just governments and large corporations. That requires a change of mindset,” said Mr. Jesús González Arellano, Partner at KPMG Mexico.

The challenge is also for governments and communities to think differently about how they tackle risk, said Mr. Mark Crosweller, Director General of Emergency Management Australia.

“Unless we use our imagination, we are not going to manage. We must have the confidence to imagine, and the courage to act on our imagination,” he said.

Earlier this week, ARISE issued a seven-point plan for resilience.

It begins with a call for the “Build Back Better” principle to be etched into planning, development, recovery and reconstruction – from building codes to government tenders and contracts. 

Second, it says it is vital to create incentives for businesses to invest in risk reduction and resilience in advance of disaster. That can mean removing legal and other regulatory barriers that prevent such investment or, worse, drive continued low-resilience investment.

Third, it calls for a more integrated approach to upgrading key infrastructure and to give local authorities more say over policy – so that money and other resources can be focused on priority areas.

Fourth, it says that businesses need to be involved before, during and after disaster. The aim is to help to ensure that private resources and expertise are mobilized in support of effective disaster risk management.

Fifth, it argues that businesses and their public sector and civil society partners should promote the benefits of resilience to consumers, and sixth, extend education and professional training. The goal is to drive an increase in public awareness – without which risk reduction and pro-resilience policies will be much less effective.

Finally, it underscores the need to harness the potential of data and technology to ensure effective implementation of resilience and risk reduction measures.


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