New business attitude to risk
GENEVA, 24 February 2012 - The business world is on "the cusp of a major revolution" in its understanding of disaster risk reduction as insurance industry demands force a shift from traditional accounting-based management to risk-based management, according to Rowan Douglas, CEO Global Analytics at Willis Group.
Speaking today in Geneva at the second joint meeting of the UNISDR Private Sector Advisory Group with diplomats from the UNISDR Support Group, he said this new form of financial management will soon begin to have an influence on company behaviors as assets are valued with closer reference to their exposure to risks.
He said that the UNISDR Private Sector Advisory Group is still in its infancy and "the challenge ahead is to integrate the awareness of risk into the economic system in order to make countries and populations resilient."
Mr. Douglas who is also vice-chairman of the UNISDR Private Sector Advisory Group, said that the last ten years of remarkable shocks had been like an overture to a 21st century symphony as the world looks ahead to "a perfect storm of environmental challenges, population growth and an increasing number of disasters."
He observed that today we have a great scientific understanding of natural catastrophes through the kind of risk modeling developed for UNISDR's Global Assessment Report but the challenge remains to "go from intellectual awareness to action in both the public and private sectors."
Opening the day-long meeting, UNISDR Chief Margareta Wahlström, said that the private sector is key to reducing risk and she was encouraged by the fact that 300 people had attended the first-ever private sector round-table meeting at last year's Global Platform on Disaster Risk Reduction.
"We are laying the foundations for a very powerful new constituency of willing actors which can help us to bring about behavioral change. The private sector has a lot to contribute to the discussions that will take place between now and 2015 when a new consensus is expected to emerge on sustainable development," she said.
Private Sector Advisory Group chairman and CEO of Titan America, Aris Papadopoulos, said: "It's tough when you begin something new and we have set some ambitious goals for ourselves. We do see that disaster risk reduction is important for all of us when it comes to building resilience and further implementing the Five Essentials that we have agreed on for business and disaster risk reduction."
Gary Domingo, Minister for Humanitarian Affairs of the Philippines diplomatic mission in Geneva, told the meeting that he viewed UNISDR's call for action on the Essentials for Business in Disaster Risk Reduction as a fourth campaign just as enabling as existing UNISDR's campaigns for safe schools, safe hospitals and "Making Cities Resilient."
"Enlisting the private sector to support the Five Essentials does not cost anything but it's a wonderful tool to get firms to sign up and a very useful way to advocate for disaster risk reduction in the private sector," he said.
The Five Essentials for business cover the development and implementation of internal codes of conduct and procedures in addition to supporting national and local legislation; leveraging private sector expertise for risk reduction; promotion of public-private partnerships; fostering exchange and dissemination of data; and support to risk assessments and capacity building "and demonstrate opportunities where resilience building is a sound economic strategy, with attractive returns and competitive advantages."
The Private Sector Advisory Group participants were Dale Sands, Senior Vice President and Global Practices Director, AECOM; Peter Gruetter, Director, CISCO; John Tobin, Managing Director of Public Policy-Sustainability Affairs, Credit Suisse; Maxime Chretien, Associate Partner, Forensic and Dispute Services, Deloitte SA; Debbra AK Johnson, Global Marketing Director, DuPont Sustainable Solutions; Joan Torrebadella Barat, Geohazards Manager, Euroconsult; Régis Thepot, Directeur Général, Grands Lacs de Seine; Peter Williams, Chief Technology Officer, Big Green Innovations, IBM; Sandra Wu, President and CEO, Kokusai Kogyo Holdings; Akira Doi, Executive Officer, Kokusai Kogyo Holdings; Nicerine Bres, EMEA Industry Development Coordinator for Public Sector and Health Care; Thomas R. Loster, Chairman, MunichRe Foundation; Christian Barthelt, Project Manager, MunichRe Foundation; Aris Papadopoulos, CEO, Titan America; Rowan Douglas, CEO and Chairman, Global Analytics, Willis Group.