Adjusting Business Continuity Plans to Adapt to a Changing Climate

Severe weather events and climate-related disasters are nothing new. On an annual basis, these types of events cost the U.S. approximately $630 billion. The U.S. has a long history of dealing with tropical hurricanes, tornadoes, flooding, winter storms and wildfires. At the same time, the frequency and intensity of these events seems to be increasing, and in addition the locations where these events are occurring is shifting. By October 2021, the U.S. experienced 18 severe weather events each costing $1 billion or more - this is almost three times the average for the past thirty years, and only includes the first nine months of the year.

September 2021 was the fifth warmest September in the 127-year record, and with it came four of these 18 notable disasters: flooding from Hurricane Ida; landfall of Hurricane Nicholas; drought; and wildfires in the West. Of all the weather anomalies, Hurricane Ida was the costliest disaster of the year and brought with it unprecedented flash-flooding in New York City and New Jersey. 2021 is the 7th consecutive year where the U.S. has experienced 10 or more billion-dollar disasters.

Now more than ever, businesses need to be able to cope with these emergencies. For any industry, surviving a disaster relies on maintaining business continuity through the event, with emergency plans that can adapt for variable threats. Flexibility is a key component in resilience and recovery. The following four steps will help any business enhance their continuity plan.

1. Understand the Risks

To plan for the worst-case scenario a business needs to understand its own capacities and limitations. The backbone of any robust business continuity plan is a Business Impact Analysis (BIA) and a Risk Assessment (RA). These assessments focus attention on realistic and probable risks and include an in-depth analysis of supply chains, utilities, facilities, people, transport, communications, and processes. A business based in Florida needs to assess its buildings and facilities to ensure that during hurricane season the infrastructure will hold against high winds, and the buildings are not susceptible to flooding. A company with production facilities in the West needs to be aware of potential atmospheric dangers from wildfire smoke. A company from the Northeast needs to prepare for arctic blasts and factor in the cold temperature limitations of machinery. The BIA and RA will pinpoint these vulnerabilities, forming the building blocks for a weather risk response plan.

a. Address the Global Supply Chain

Any company that relies on suppliers spread out across the U.S. or internationally, needs to monitor the weather at home and where suppliers are located. In 2011, Western Digital Technologies, suppliers of hard disk drives, was affected by flooding in Thailand where production is based. Their sharp decline in revenue had knock-on effects to the larger computer manufacturing industry that had not realized that a weather event halfway across the globe could impact their businesses.

b. Evaluate Vendors

No business functions without its suppliers and vendors. When onboarding a vendor, it is important to know their emergency response plans and understand their ability to provide their service during a severe weather event. A vendor’s business continuity plan impacts their client’s ability to maintain operations. Their ability to anticipate and meet increased supply needs during an emergency will factor into which vendors prove worthy of onboarding, and which are too risky to sign.

2. Build a Response Plan

Once a full circle vulnerability risk assessment of assets is complete, an all-hazards emergency preparedness plan can be tailored to address a business’s specific weather threats. This plan will dictate the appropriate steps of action to take in advance of, during, and after a severe weather event. The plan will include mitigation strategies to safeguard life, reduce risks, and minimize operational and financial costs. After completion, the plan needs to be disseminated to all staff and practice drills implemented. Staff need an opportunity to run through procedures, know exactly what to expect in an emergency, and understand any responsibilities they hold. Enacting the response plan and ensuring staff are prepared will not only protect lives but contribute to the ongoing functionality of a business through an event and sets in motion actions for a speedy recovery process.

a. Support Personal Preparedness

For personnel to be able to support a business during a severe weather event, their homes and families need to be ready for the event. Businesses can share best practices and checklists for employees to prepare their home life with emergency kits and contingency plans. Knowing that homes and families are cared for will allow employees to focus their efforts on executing the company’s response plan during a crisis.

b. Make Continuous Adjustments

Responding to weather requires flexible and time-sensitive decision making. Depending on how the weather conditions strengthen or weaken, an emergency response plan should adjust for each scenario. Many response plans factor in a timeline of actions, depending on the distance of a storm from your monitored locations. As soon as a trigger is reached (usually based on the location of the storm and probability of impact), the plan commences, and actions are taken at each milestone. While these actions are necessary, timing them can be equally important. Generic response plans that don’t adjust actions if a storm speeds up or slows down will cost a business time and money. You may find your business either unprepared for the arrival of a storm, putting lives at risk, or you may be taking unnecessary actions should a storm conditions change, increasing costs or lowering production for no reason. This is where up-to-the-minute storm alerts can help managers implement their plans and where accurate timely information plays its most important role.

3. Use Scientific Tools

Accurate and timely information is key to decision making in any emergency scenario, especially as weather changes so quickly. Establishing a network of resources, both public and private, is a top priority for emergency managers. Private resources, such as professional 24/7 weather intelligence services, provide reliable data and customized alerts for the GPS coordinates of any business. The advice and guidance provided from a meteorological team is tailored to the client’s individual business needs, disseminating the information at large into site-specific usable data. Public resources include national and local government, who provide safety guidelines for the larger regional community.

To adjust for change, private specialized climate models can forecast reasonable scenarios and highlight high-level risk probabilities by region, such as for flood, drought, or sea-level rise, and account for long-term changes in temperature, humidity, or rainfall. This information helps business with longer term resilience planning. In some cases, this involves assessing future site locations for a company wanting to expand globally.

4. Plan for Long-Term Resilience

Building a long-term resilience strategy is the most cost effective and sustainable practice for successful business continuity. With the knowledge obtained through risk assessments and weather intelligence services, businesses can make permanent improvements to their infrastructure and emergency responses. Learning from previous weather events will help to prepare for the future. Following each event, a business should take stock of its response plan: was it effective; was the company sufficiently prepared; did anything arise that was not previously considered; were staff safe; were facilities affected; was there adequate access to information; did alerts go out when needed; were utilities affected?

Reviewing each event ensures that emergency response plans are evaluated regularly, incorporating tweaks or additions to the plan supports future business continuity and the overall reduction of costs. With long-term improvements in place companies can be better prepared for more irregular or unforeseen events, including weather that is more severe, more frequent or longer lasting than previously experienced, or even weather events not previously experienced in the area. The February 2021 winter storm was enhanced by a shift in the polar vortex leaving nearly 10 million people without power. Hurricane Ida in August 2021 brought unprecedented flash flooding to the Northeast, despite making landfall in Louisiana. These types of unexpected events illustrate the shifting weather dynamics. To avoid being taken by surprise by the impacts and business disruptions caused by such events, business leaders should prioritize developing long-term business continuity solutions to address potential new risks.

The ever-changing nature of the weather requires flexibility in coping methods and rigorous planning to avoid business disruption. Maintaining business continuity and taking effective action to mitigate risks can turn into a competitive advantage in the marketplace, keeping prices stable, attracting employees and clients to the business, and increasing expected returns in the long run.

Mike Venske is a meteorologist, and the Global Director of Client Services at StormGeo, a 24/7 provider of weather intelligence and business decision guidance. Mike works directly with customers to help them perform vulnerability assessments and develop and implement business continuity programs for their teams.

Originally published in Disaster Recovery Journal.