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Business Should Prepare for Extreme Climate Conditions

Aug. 2, 2016
Extreme wet or dry conditions can affect buildings, machinery, data centers, transportation networks, supply chains, people and sales. 

Preparation is key in order to deal with the “increased, extreme rainfall that a changing climate will almost certainly deliver,” says FM Global.

“Businesses must recognize that climate change is happening and it will generally get warmer,” cautions Dr. Kevin Trenberth, a senior scientist at the National Center for Atmospheric Research, in a report" “Coping with Extremes: The Impact of Climate Change on Extreme Precipitation and Flooding in the United States and how Businesses Can Prepare Now. “

In general, wet areas of the country will likely become wetter and dry areas drier. Of particular concern, the paper states, are changes that are severe in the extremes: “Extreme events have the greatest potential to produce natural catastrophes that affect businesses, jobs and economies on a regional or global scale.”

The report introduced several new climate-related concepts, including:

Geographic variability: “Certain regions of the United States are expected to be prone to more intense precipitation events and a potentially increased risk of flooding,” the report states. “Others are prone to less precipitation, prolonged droughts and a potentially increased risk of wildfires. Since these anticipated changes are not uniformly distributed geographically, it is recommended that businesses and property owners prepare for locally intense precipitation or drought considerations, depending on their location.”

Bigger rainfall, but maybe not more overall: Although much of the country has gotten wetter in recent decades, long-term precipitation averages will not necessarily change significantly. Rather, rain may be less frequent but more intense.

The business impact: Extreme wet or dry conditions can affect buildings, machinery, data centers, transportation networks, supply chains, people and sales. When companies have a choice, the experts advise, they should site their facilities in nothing less than 500-year flood zones (where there’s only a 1-in-500 chance of a flood every year). Companies should sharpen their focus on water management, i.e., diverting water from property, optimizing drainage and protecting water supplies, and consider new weather extremes when managing supply chains.

The  report  warns businesses of psychological obstacles to preparation. One is “generational memory threshold,” where a community’s collective memory is too short to remember major disasters such as an earlier 1-in-500-year hurricane.

Another obstacle is heedlessness. In earlier FM Global research, 96% of financial executives surveyed said their companies had operations that were exposed to natural catastrophes like hurricanes, flood and earthquakes; yet fewer than 20% said their organizations were “very concerned” about such disasters hurting the bottom line.

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