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Global Assessment Report on Disaster Risk Reduction 2013
From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction |
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Global Assessment Report on Disaster Risk Reduction 2013
From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction |
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FDI foreseen for 2014 were disaster-risk sensitive, this would represent an enormous business opportunity. And FDI is only a small proportion of total investment in produced, natural and intangible capital.
Disaster risk management as a business sector
Many businesses now see disaster risk management as both an opportunity and a key sector for development. Among companies polled by the Economist Intelligence Unit, 63 percent saw opportunities to generate value from disaster risk reduction (for example, developing new crop-insurance products or designing more resilient structures) and 20 percent had already generated new revenue (UKTI, 2011).
As highlighted in this report, these opportunities include the development of applications to provide risk estimates and information and platforms for corporate risk management. They will also increasingly embrace the design of infrastructure and buildings, of ecosystem approaches to disaster risk management, and the provision of advice and technical assistance to the public sector.
But the scope is not restricted to those activities explicitly labelled disaster risk management. A large and growing number of business initiatives are unfolding in all regions. They are creating value from the sustainable management of natural capital and the environment, from reducing energy consumption and investing in renewable energy and from involving and benefiting local communities and households.
Although many of these initiatives contribute to climate change mitigation and adaptation, environmental sustainability and increasing local incomes and employment, some already generate co-benefits vis-à-vis reduced disaster risk. The green building movement is a good example of a new business area that generates benefits in all these domains. The vast scope of these initiatives not only includes businesses but designers v and others that stimulate business innovation.
Many of these initiatives are now being driven under the sustainability agenda of businesses rather than through the risk management agenda. However, to the extent that they address underlying drivers of disaster risk—such as declining ecosystem services and badly planned and managed urban development—they will also have a major impact on the future of disaster risk. They often reflect a change of core values in a new generation of professionals entering business, which are more likely to embrace concepts such as sustainability and equity more than their peers of previous generations. But they also recognise that change requires investment and investment can mean business opportunity.
Businesses investing in these initiatives often recognise that the creation of shared value rather than shared risk is essential for longer-term business resilience, competitiveness and sustainability, while presenting immediate opportunities to generate revenue and new business opportunities.
Certification and standards
The development of disaster risk management as a business sector that creates shared value will be stimulated by the introduction or adoption of certification or similar types of ‘seals of approval’ (Johanesson et al., 2013; FM Global, 2010
FM Global. 2010.,Why Companies Risk it All ? Flirting with Natural Disasters.. .  Mahon et al., 2012 Mahon, R., Backen, S. and Rennie, H. 2012.,Evaluating the Business Case for Investment in the Risk Resilience of the Tourism sector of Small Island Developing States., Background Paper prepared for the 2013 Global Assessment Report on Disaster Risk Reduction., Geneva,Switzerland: UNISDR.. Click here to view this GAR paper. Certification programmes already exist in a number of sectors, for example, in sustainable tourism and forestry and in energy-efficient building. At present, these programmes rarely make explicit mention of disaster risk management, though reducing disaster risks may be an important co-benefit. For example, certification of sustainable urban development can be adapted to include assessment of drainage and run-off capacity, flood risk and heat absorption.
The benefits of certification are that businesses investing is hazard-resistant building or infrastructure, for example, would probably see higher growth and
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