When climate disasters strike: Incorporating extreme weather planning

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May 12, 2022 - Soaring temperatures, wildfires, hurricanes, tornadoes, and freezing rain are becoming more severe and frequent, particularly in areas that are not accustomed to these events. The damages caused by such extreme weather disasters are not limited to just the physical destruction you can see, as threats will be felt in human health and safety, food and water sourcing, supply chain vulnerabilities, infrastructure breakdowns, and security risks.

BSI’s experts discuss the rise in life-threatening climate phenomena and why it’s more important than ever for businesses to create disaster preparedness plans.

The consequences of climate change are clear. The National Oceanic and Atmospheric Administration’s (NOAA) National Centers for Environmental Information (NCEI) reports that in 2021, the U.S. experienced a record breaking 20 weather or climate disasters that individually resulted in at least $1 billion in damages. Last year came in second to 2020 in number of total disasters of 20 versus 22 and cost a staggering $145 billion. But what is most notable about 2021, according to the NCEI, is the diversity of each disaster.

The costliest events of 2021 were Hurricane Ida at $75 billion, the February winter storm and cold wave felt in Texas at $24 billion, and the western wildfires spanning from California to Idaho at $10.9 billion. 2021 was the seventh consecutive year observing 10 or more billion-dollar disaster events and the NCEI warns that extremely high occurrence of devastating climate events is becoming the new normal.

When a natural disaster occurs, says Jim Yarbrough, Practice Director, Supply Chain, there is a great deal you can do to prepare and respond to those disasters. Tony Pelli, Practice Director for Security and Resilience agrees, suggesting companies need to start their security resilience preparedness planning process immediately. Ideally this should be done when work is just beginning with a new supplier or when a site is at the set-up stage. Organizations can embed their procedures early on and fine tune them as they progress, he explains, but it’s never too late to begin. Collaboration, exercises, and drills will uncover any missed scenarios and potential impacts when an event occurs. Pelli also emphasizes defining recovery time goals and what is actually possible at any given site, as this will help identify the financial impacts of potential downtime.

Take a closer look at the region or country you operate in, suggests Yarbrough. Oftentimes we see the same regions have very different approaches to handling such events. Understanding the regional resiliency of supply chain processes or electric grid capacities, for example, can help an organization better mitigate the risks associated with weather-related disruptions.

Pelli agrees, adding regional impacts are currently apparent in sectors like pharmaceuticals and medical devices. A lot of manufacturing and packaging for those industries occurs in Puerto Rico because there are massive tax breaks offered. However, he says, that is purely a financial focus. The larger picture must be considered, as that region is probably going to be battered by increasingly extreme hurricanes over the next 15 to 20 years. Making sure weather analysis is part of site selection procurement is vital. We're already seeing the impacts of poor choices in that area on really important industries, he warns.

Additionally, Ryan Lynch, Sustainability Practice Director, says successful extreme weather preparedness encompasses supplier relationships and should cascade its way up within an organization to address the entire procurement function. Think about the arctic blast that hit Texas last year, he says. The entire grid was shut down because that region just isn’t prepared for severe freezing and ice events. As these events are becoming more intense and more frequent, he explains, how can we build the support structures to mitigate disruptions to organizations?

Address the following questions early on:

  • Are extreme weather considerations baked into the buying decisions of the organization?
  • Are there thoughts about how regions the organization is relying on to buy certain commodities or materials are impacted?
  • Are there already plans for “what if” scenarios and adjustments to buying practices?

View the full expert conversation and join us for BSI’s upcoming Extreme Weather Webinar.

Ryan Lynch Practice Director, Sustainability

Ryan Lynch

Ryan Lynch, Practice Director of Sustainability, works with organizations across multiple regions and industries to design creative solutions to drive organizational improvement, improve upon social/environmental impacts, and mitigate and remedy risks.

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Tony Pelli, Practice Director, Security and Resilience

Tony Pelli

Tony Pelli, Practice Director, Security and Resilience, has extensive experience conducting enterprise-level supply chain and physical security risk assessments for global companies and their supply chain partners. Tony helps clients design, implement, and refine their risk mitigation programs.

Jim Yarbrough Practice Director, Supply Chain Risk Intelligence

Jim Yarbrough

Jim Yarbrough, Practice Director, Supply Chain Risk Intelligence, leads BSI’s team of supply chain security analysts and assesses the potential threat of terrorism and cargo disruption to countries and businesses worldwide.

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