Thinking about disasters is a hard sell. But whether we think about them or not, we pay for them. According to the 2015 UNISDR Global Assessment Report, expected annual global losses are estimated to reach $314 billion in the built environment alone. All indicators suggest that the frequency and intensity of disasters will increase, meaning that this cost will go up. Disruptions—natural, human-caused, or a combination of the two—are inevitable.
In this new reality, organizations that are able to manage risk will be better prepared to withstand disruptions and to capitalize on opportunities as they arise. Building owners are well positioned to take a leadership role and to benefit by going beyond preparedness to resilience.
Green building strategies can play a role in risk mitigation, but by themselves, they do not position organizations to respond to a dynamic environment. By building on sustainability efforts and tools, however, it is possible to prepare for disasters in ways that make organizations stronger today and that pay off whether disaster strikes or not. This is what Judith Rodin, President of the Rockefeller Foundation, calls the “resilience dividend,”—the return on investment that organizations (both public and private) can achieve by investing in resilience strategies.
Resilience can be defined as the capacity of individuals, organizations and communities to adapt and thrive in the face of stressors and shocks. Shocks are the big events that keep emergency managers awake at night—major storms, earthquakes, tsunamis and other headline-grabbers. The stressors are what make us vulnerable to those shocks—crumbling infrastructure, degraded environments, public health issues, chronic unemployment, poverty.
The ability to weather the proverbial (and literal) storms will require new levels of creativity. The resources simply don’t exist to solve one problem at a time. The threats we face are interrelated, and the solutions must be as well. Systemic approaches are our best hope.
Many studies of disasters reveal how addressing underlying vulnerabilities can limit the impact of events and speed the recovery (for example, see Social Capital and Community Resilience by Daniel P. Aldrich and Michelle A. Meyer). The places, people and organizations that fare best are not necessarily those that are the strongest per se—strength without flexibility creates rigidity. Instead, resilience lies in the multiple points of connection—between people and communities; between sources of critical resources like energy, water and food and their destinations; across modes of transportation and communication; across segments of society.
Resilience is not an end state—it is a practice. Those points of connection are not created overnight. They require on-going maintenance and development. Local governments are gearing up to tackle many of the issues, but their efforts cannot do everything. Every sector of society has a part to play.
Building and property owners are well-positioned to take a leadership role at a finer grain in the built environment. Buildings serve as a nexus of the physical environment and human interaction. The way buildings are designed, managed and operated matters on a daily basis as well as during disruptions.
Resilient operations require assessing risk not only at the building and operational scales, but also at community scales. The vulnerabilities of the communities that intersect with a building have a direct connection to resilience of organizations themselves. Imagine, for example, that in a disaster your facility remains intact, but that the neighborhood around you is in chaos. You may not in fact be able to resume full operations in a meaningful way.
But what if you have existing relationships with your community and already know who will need help and who will be able to provide it? What if you are able to offer shelter, energy, water or food to your neighbors? What if you have invested in making sure your maintenance staff is trained to act as first responders?
Suddenly you are no longer a victim of the disaster. You are the hero.
This means broadening your understanding of your community to include your workers, contractors, visitors and suppliers. It requires thinking beyond your span of control and considering your span of influence and connection. It requires talking to your neighbors.
But the potential rewards are substantial, and go far beyond those of corporate altruism. By incorporating social vulnerability assessments, direct community engagement processes and programs that promote social equity into your risk management program, you can generate measurable value. By making your physical assets as well as the people in and around them more resilient, you open the door to mutually beneficial opportunities.
The business case for an integrative approach to resilience is strong, as organizations can capture direct and indirect benefits such as:
- Reduced uncertainty
- Improved business continuity, including reduced losses and faster recovery
- Improved financing terms and insurance rates associated with risk reduction
- Reduced operating costs associated with simple, local or passive strategies
- Improved ability to leverage new opportunities
- Improved community relations
- Improved brand association
- Improved quality of life and public health for both building occupants and the surrounding community
With new tools and programs currently under development, what sound like lofty goals on first blush can become realistic, cost-effective measures that can be implemented at the building scale. For example, on a global level, the R!SE initiative, an international effort being led by the United Nations Office for Disaster Risk Reduction, PricewaterhouseCoopers and other partners, is developing a framework to make all investments, private and public, risk-sensitive. The program will engage with business, the public sector, education, civil society, insurance and investors.
At a local level, the USGBC Los Angeles Chapter is developing a Building Resilience rating system to work seamlessly with LEED for existing buildings that includes metrics and processes for risk management and resilient operations of both physical assets and social capital. While the program will focus initially on Southern California, it will serve as a template for a broader national/international program.
FEMA estimates that $1 in preparedness is worth $4 in recovery. Others put that ratio closer to 1:20 or more. The goal now is to activate investment of that first dollar in resilience and to leverage as far as it will go.