GAR 2013 Main Report

Small and medium enterprises are particularly at risk: A single

disaster may wipe out all or large parts of business capital of small

enterprises, in turn affecting large companies relying on local suppliers. Yet,

less

than 15 percent of companies with less than 100 employees in disaster prone

cities in the Americas have a

business continuity or crisis management

plan in place (Chapter 11).

Disaster risk is a new multi-trillion dollar asset class: Global capital

flows have transformed the landscape of disaster risk, creating a new pile of toxic

assets for businesses and governments that do not currently appear on balance

sheets (Chapter 2). Globally, US$71 trillion of assets would be exposed to one-

in-250 year earthquakes. In Honduras, already a one-in-33 year disaster would

create a significant financing gap for the government with impacts on future GDP

(Chapter 5).

Most disasters that could occur haven’t happened yet: Total

expected annual global loss from earthquakes and cyclone wind damage

alone now amounts to

US$180 billion per year (Chapter 3). This figure does

not include the significant cost of local disasters from floods, landslides, fires and

storms (Chapter 4) or the cost of business interruption. Agriculture is also at risk:

in Mozambique a one-in-10 year drought would lower maize yields by 6 percent

and GDP by 0.3 percent (Chapter 6).

Risks to natural capital compromise future wealth: Disaster risks

include the loss and erosion of

natural capital with serious consequences for

business, households and a country’s wealth. For example,

wild-land fires

now affect all continents with global annual losses to tropical ecosystems alone

potentially

reaching US$190 billion per year (Chapter 6). Land degradation

increases agricultural drought risk; in Africa, the total area with high degradation

and high drought hazard is almost 260,000 square km.