Many businesses, business associations, and financial institutions such as the World Bank, have in recent years recognised the impact on profitability resulting from the practical implications of climate change.

Climate change related risks are increasing in urgency, likelihood and frequency, with business continuity and insurance implications. Economic losses from natural disasters are accelerating, for example in the USA, Hurricane Andrew in 1992 resulted in USA$25 billion of insurance claims, compared to Hurricane Katrina in 2005 with more than USA$45 billion claims.

As a result of the experienced natural disasters of recent years and the current worldwide inadequacy of response to the underlying causes of climate change, adaptation has increasingly become the focus for action. “Climate Change 2014: Impacts, Adaptation, and Vulnerability”, the contribution of Working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) released earlier this year, highlighted the adaptation issues.

At the organisational level, impacts can include damage to facilities, disrupted supply chains, dramatically increased or reduced product/service demand depending on the industry, lost productivity and loss or absence of key personnel.

Planning to maximise organisational resilience in the face of business interruptions due to natural disaster has therefore become more important than ever. It is especially timely to consider these potential interruptions now ahead of the weather impacts that come with the warmer months across Australia.

A critical part of organisational resilience is effective Business Continuity Management (BCM). In summary, the steps for readying an organisation for business disruption using BCM include:

  • Conduct a Business Impact Analysis in accordance with ISO 22301:2012 Societal security – Business continuity management systems
  • Develop crisis management and business recovery strategies
  • Develop a user-friendly and organisation-specific Business Continuity Plan
  • Properly plan for the implementation of the developed Business Continuity Plan then roll it out to all staff
  • Deliver staff training in the use of the Plan and their responsibilities under it
  • Test the Business Continuity Plan and incorporate outcomes as part of the Plan review process
  • Undertake regular monitoring and review of the Plan, including regular training and testing to ensure that personnel are ready should an event occur which disrupts key business operations.

Also refer to issue 35 of Insight, “Tips for Business Continuity Management” for a discussion on critical considerations during this process.

Please contact QRMC for more information.