October 21, 2020

Do You Have a Plan to Climate-Proof Your Business?

Although COVID-19 will be the defining news story of 2020, we can’t overlook the extreme weather and natural disasters sweeping the United States this year.

As I write, Hurricane Sally is making landfall on the Gulf Coast, barely two weeks after Hurricane Laura rocked the same region. That’s not to mention the two other named storms gliding across the Atlantic Ocean and Gulf of Mexico, or the two additional systems possessing a high chance of formation in the next few days, according to the National Hurricane Center.

On Facebook, I see pictures of the destruction resulting from massive wildfires sweeping the Western US, especially in my home state of California. Against this backdrop of human tragedy, 2020 is likely to go down as the most expensive year on record in terms of weather-related damage. In fact, we’d already racked up more than $10 billion in total losses before accounting for any of the disasters I mentioned above.

Here’s the simple truth: we’re going to see the costs of extreme weather continue to rise as the impact of climate change becomes more pronounced. In response, many businesses are scrambling to “climate-proof” their operations as much as they can.

So, where can you begin with managing your risk? The first step toward climate-proofing your business should be to identify as many points of vulnerability as possible.

Identify Your Weak Points

Your operations are a complex, interconnected web of processes including fulfillment, supply chain, customer service, payment processing, and more. A breakdown at any point in this continuum could have catastrophic consequences. Even a short interruption, like a power outage that lasts for a few days following a storm, could have lasting consequences.

The best approach is to run a variety of scenarios, swapping out counterfactuals to gauge your exposure. For instance, are you vulnerable to seasonal flooding? Could you be vulnerable to flooding from an unusually-powerful storm? What are the odds that such a storm might hit you?

You also need to account for how weather events might impact operations outside your offices. Are your suppliers vulnerable to disasters like hurricanes and fires? If so, how would a disruption of their operations impact you? While all these calculations will vary based on your situation, here are some basic questions to consider:

  • Where is your merchandise stored? Do you have other warehouse locations with stored merchandise that might be exposed?
  • How quickly could your entire team pivot to remote work for service and/or fulfillment? Are you reliant on at least some staff being on-site?
  • Will your offices be accessible, or might they be cutoff by debris or damaged roads? What consequences could arise if you can’t get to your office?
  • Do you have remote records? Or are all your important documents stored in one place? What about other valuable assets that might be in danger?
  • What about your workforce? Could your employees be put in danger or forced to evacuate at the last minute?

It’s a good idea to separate potential risks into immediate and more long-term threats. For instance, you might be vulnerable to flooding in a decade, but still have other, more important concerns to address now.

Create Plans for Continuity

Once you identify your points of risk exposure, you need to start creating a plan for how to mitigate those threats. This means going point-by-point to create dynamic, adaptable contingency plans.

View each scenario as a set of variables in a logical function. Essentially, you need to say to yourself, “if a, and also b and c, then d.If a hurricane hits the Gulf Coast, and you’re expecting a shipment from a supplier in Florida, then your shipment will probably be delayed. That’s just an example; there may be hundreds of scenarios for which you need to have a plan in place.

I can speak from experience; when Hurricane Irma hit back in 2017, our offices were without power for several days. Fortunately, we had a hurricane preparedness plan in place that designated point people who were able to find safe places with access to electricity and internet. These individuals then coordinated with people in other departments to facilitate essential functions. As a result, we were able to get up and running remotely within hours after the storm.

All of these contingencies together are what make up a business continuity plan, or BCP. Your BCP should be a thorough, methodical guide that you can consult to overcome any variety of variables in an emergency, and ensure that any interruption will have only a minimal impact on your business.

The key takeaway here is that your plan must be detailed and practical, yet adaptable at the same time. Circumstances on the ground are going to change by the minute, and your continuity plan needs to adapt accordingly.

You’re Never Done Planning

Understanding that your plan is never complete is just as important as having a plan in the first place. We live in a dynamic, fast-changing world, and your response to circumstances needs to evolve with time.

You also have to accept that there are certain contingencies for which you can’t plan. Although Donald Rumsfeld was chided for the context in which he said it in 2002, there is logic in the distinction between “known unknowns” and “unknown unknowns.” If the COVID-19 pandemic should teach us anything, it’s that the ocean of unknown unknowns in the world is a lot deeper than we could have expected.

Developing a continuity plan to contend with climate disaster calls for some level of trial-and-error. Thus, it’s a good idea to address this by periodically testing your plans to see how well they hold up. It’s the same principle as with those fire drills you remember from elementary school, just in a business context.

Periodically testing your preparedness, both with informal thought experiments and with mock scenarios, will expose weaknesses or outdated elements of your preparedness plan. This is critical work, because having an outdated plan may well be worse than having no plan at all.

Don’t Forget to be Human

It’s important to make plans to protect your infrastructure, merchandise, and technology from climate change. That said, protecting the people who make up your workforce is, by far, the most important thing here.

You need to allow space for your employees to recover in the event of a disaster like a fire or flood. You can’t expect workers to put your needs above everything else when dealing with a major crisis. Everyone in your organization will have family and other personal concerns to address, and you need to embrace the fact that those are going to take priority over work. This is doubly true if conditions are not yet safe for employees to return to the office.

Being flexible after a natural disaster is a moral principle, but it’s also a practical one. Allowing space for employees to tend to themselves and their families, and taking an active role to ensure everyone stays safe and has what they need, will make for a stronger organization in the long run. Things will eventually settle down after a crisis, and when they do, you want to come back as strong and united as possible.

Finally, I want to be clear that my goal isn’t to instill in you a sense of permanent anxiety. You shouldn’t live your life obsessing over every contingency, worried that something that might go wrong. However, given the massive threat that climate change poses, it would be irresponsible to not plan ahead.


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