Simple steps to protect your business from disasters Ulanbaataar, Mongolia 31 March 2017

Outline of sessions I. How disaster proof is your business? 10 key questions II. The growing threat of disaster risk II. Business continuity planning pays IV. 12 Steps to protect your business A strong business environment needs good partnership with the public sector. Why? Public utilities ie roads, water supplies etc are the ‘lifelines of private enterprises big and small

Session I. How disaster proof is your business The walk of resilience   How disaster proof is your business The walk of resilience A quick self-assessment

The Walk of Resilience 1. Is my business located in an area exposed and vulnerable to floods, cyclones & other hazards? Yes/No 2. Would a direct hit from a hazard, ie flood or cyclone, close my business? Yes/No 3. Does my business have a continuity plan? Yes/No 4. Does my business have back-up systems (ie IT or alternative premises) it can use in case of a disaster? Yes/No 5. Is my business insured against disaster losses? Yes/No

The Walk of Resilience 6. Does my business have an alternative key supplier ready if a disaster closes the current one? Yes/No 7. Are my local and national authorities prepared for floods & other hazards? Yes/No 8. Would my business suffer if public utilities such as roads, power and water were cut? Yes/No 9. Does my business see DRR as a business opportunity? Yes/No 10. Will my business consider disaster risk in future operational and investment decisions? Yes/No

A more detailed self-assessment Let’s look at the same questions in more detail; Please look at the self-assessment grid that you have received

Self-assessment rating This is: A simple benchmark of your business & disaster risk Not a score to rate whether your business is good or bad Your total 10: Need to strengthen awareness/action on disaster risk 11-20: Emerging awareness/action on disaster risk 21-30: Strengthening awareness/action on disaster risk 31-40: Disaster risk being managed well

Session II. The growing threat of disaster risk

More disasters The number of disasters recorded are increasing year on year. In particular, hydro-meteorological disasters The trend is that disasters are becoming more unpredictable, intense as well as frequent Current El Nino is one of the strongest Reference documents here if needed (HFA Decade; 2013 Disasters; Munich Re map) Disaster occurrence in Asia and the Pacific (Source: EM-DAT)

Disasters are costing more - One of the strongest trends is the rise in economic losses Economic and human losses in Asia and the Pacific (Source: EM-DAT)

Asia Pacific business agrees  Allianz Business Risk Barometer 2017 Business interruption, supply chain risk Market developments (volatility & competition) Natural catastrophes Cyber incidents Fire, explosion Macro-economic developments (inflation) Changes in legislation & regulation Loss of reputation & brand value New technology disruption Human error

The ‘new normal’ means greater risk   Businesses continues to be located in highly-exposed locations (Thai floods) Risk is more complex & inter-connected – EQ in Japan closes car factories around the world Once hit, it’s hard to recover – Kobe port after 1995 EQ; 10 months after 2011 EQ in Japan one-third of SMEs still not restarted business

Impact on unprepared business UNISDR-PWC survey of 1,200 enterprises in the Americas found fewer than 15% of firms with less than 100 employees had a business continuity plan 2011 Christchurch NZ EQ: 97% of all affected enterprises were SMEs & 14 months after EQ 37% SMEs still reported reduced revenues 2011 Japan EQ: 10 months after the disaster one-third of SMEs had still not restarted business; Damage to Renesas microchip maker in Japan led to 150,000 fewer Toyotas being made in US & the company losing $1.2bn globally

Session III. Business continuity planning pays A strong business environment needs good partnership with the public sector. Why? Public utilities ie roads, water supplies etc are the ‘lifelines of private enterprises big and small

Why BCP …. It’s the cheapest form of insurance for your business   It’s the cheapest form of insurance for your business It saves you money & helps your business recover quickly if hit by disaster It protects your business’s assets, operation and reputation It makes businesses think about taking disaster risk management more seriously ie investment policy It makes enterprises see the value of working with the public sector to protect the ‘lifelines’ of business

It protects your business & its reputation 75% of companies without BCPs fail within three years of a disaster A year after Hurricane Sandy all the businesses on this NYC street were still closed … apart from one bar Let’s share one example of how BCP works

Common BCP principles   Avoid risk: ie pull out of hazardous locations; refuse to work with suppliers who are not ‘resilient’ Reduce risk: ie upgrade existing infrastructure Share risk: ie insure assets, hedge risks, contractual agreements Accept risk: ie business accepts zero risk is impossible and agrees to accept residual risk after above measures

It helps your business recover quickly The day after the 2011 EQ multiple logistics routes were secured & 400 workers from non-hit areas were brought in to help All 10 supermarkets in Tohoku supplied by Seven & I Holdings Co. Ltd reopened (Ishinomaki reopened the same day) Company’s distribution firm revised its contingency plan seven times since 1995 Kobe EQ Local store managers had authority to reopen quickly

Session IV. 12 steps to protect your business A strong business environment needs good partnership with the public sector. Why? Public utilities ie roads, water supplies etc are the ‘lifelines of private enterprises big and small

12 steps to protect your business BCPs come in many forms but most include the following elements Assess your risk (look at past experience) Assess your critical business functions Review planned investments for disaster risk Invest beyond codes Prepare your supply chain Create an emergency management plan for your employees

12 steps to protect your business 7. Back up your computer data 8. Create a crisis communications plan 9. Assemble emergency supply kit (incl records & cash) 10. Review your insurance coverage 11. Plan for an alternative locations 12. Exercise your plan – write it down and test it

Group work Let’s go through the 12 steps together to see which steps your business can take now? Of the steps you cannot take now – discuss in groups which are the most important and how you could take these steps in future

I Thank you