Private sector hammers out resilience plans
GENEVA, 12 April 2016 – An international business group working to reduce the impact of natural and man-made hazards has pledged to ensure that the private sector plays its part in implementing the Sendai Framework for Disaster Risk Reduction.
The UNISDR Private Sector Alliance for Disaster Resilient Societies, or ARISE, today held a meeting to hammer out plans to help companies get involved in achieving the goals of the Sendai Framework, a 15-year agreement that seeks to curb disaster deaths and economic losses.
"Just as it is a key player when it comes to tackling climate change, so the private sector has an equally critical role in the success of the Sendai Framework, whether it is ensuring that investment is risk-sensitive, that infrastructure is resilient, that regulations address the threat of hazards, or that risk is understood by all of society,” said Mr. Robert Glasser, head of UNISDR and co-chair of ARISE.
“ARISE is a key vehicle to leverage the private sector's expertise and to ensure that business itself is fully aware of hidden risks and acts to reduce the risks it faces," he added.
Among the areas in focus are ensuring that disaster risk reduction is part and parcel of business education, that the insurance sector drives change by factoring risk properly into premium-setting and that countries’ investment profiles include risk assessments – ARISE is working with the Economist Intelligence Unit on the latter issue.
ARISE, which has 140 member organisations to date, also aims to help small- and medium-sized enterprises reduce their risk. That is a critical factor for resilient societies, given that such firms account for over 80 percent of employment.
The Sendai Framework, adopted by the international community in March 2015, has seven targets. The first four hinge on substantial reductions in global disaster mortality, the number of people affected, economic losses, and damage to critical infrastructure. The remaining three seek an increase in the number of countries with national and local disaster risk reduction strategies by 2020, strengthened international cooperation for developing countries, and access to multi-hazard early warning systems and disaster risk information and assessments.
By 2030, global average annual losses due to disasters are forecast to increase to US$415 billion, from US$260 billion in 2015, owing to factors including climate change and the expected growth of risk-exposed assets. This growth in risky investments is often due to a lack of adequately costing disaster risk, coupled with high profit margins for investments in many areas exposed to earthquakes, tsunamis, storm surges, floods and other hazards.
In the event of a disaster, the cascading impacts result in losses far beyond that of the principal investor. The resilience of businesses is critical – whether they are one-person operations or multinationals whose supply chain disruptions can sow global havoc – notably because the private sector is responsible for 75 percent of investment in infrastructure.
It is to address such issues that UNISDR has been working closely with the private sector for five years. ARISE was created last November to sharpen the approach, merging the work of the UNISDR Private Sector Advisory Group, Private Sector Partnership and R!SE Initiative.
While the Sendai Framework puts the onus on governments to bring about change, it is unusual in the world of international agreements because it also says that other players have a specific role, with the private sector one of those singled out.
It’s up to the private sector to seize the opportunity, said Mr. Glasser’s fellow ARISE co-chair, Mr. Oz Ozturk, a partner at global consultancy PwC, which hosted today’s meeting.
“The private sector plays an integral role in disaster risk management. If we look at the Sendai Framework, we see that within the next five years each country in the United Nations should have a plan which encompasses the private sector’s involvement in driving resilience. So the time is now to start thinking about what that involvement looks like, rather than waiting five years from now and being told what to do,” Mr. Ozturk said.
Besides Mr. Glasser and Mr. Ozturk, ARISE's board comprises vice-chair Mr. Carlo Papa of Italian utlities group ENEL, Mr. Mark Cooper of US retail giant Walmart, Mr. Philippe Derieux of French-based insurer AXA Group, Princess Abze Djigma of Mali-based AbzeSolar, Mr. Eduardo Martinez of the UPS Foundation, Mr. Graeme Newton of consultancy Deloitte Touche Tohmatsu Ltd., Mr. Aris Papadopoulos, former chief of construction materials group Titan America, Mr. Hans Sy of Philippines shopping mall group SM Prime, Mr. Peter Williams of IBM, and Ms. Sandra Wu, Chairperson and Chief Executive Officer of Japan-based Kokusai Kogyo Co., Ltd.