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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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Conclusion:
From Shared Risk to Shared Value
As the ongoing global economic crisis has put a spotlight on hidden risks in the global economic system,
landmark disasters, such as Hurricane Sandy in 2012 and the East Japan Earthquake and Chao
Phraya river floods in Thailand in 2011, may have contributed to a
turning point in business awareness of disaster risks.
Businesses and governments are beginning to recognise a new category of toxic assets as an unforeseen consequence of economic globalisation. While these toxic assets do not currently appear on their balance sheets, embedding disaster risk management in business processes is increasingly seen as a key to resilience, competitiveness and sustainability: a business survival kit in an increasingly unpredictable, complex and fast-changing world. But this change is recent, and there are few blueprints or well-worn paths to follow. In the coming years, as more businesses innovate and gain experience in this area, new paradigms will emerge that in turn will help to redefine the future of disaster risk reduction. The transformation of the global economy over the last 40 years has created unprecedented wealth: Global GDP grew by 75 percent between 1992 and 2011 and global GDP per capita by 40 percent, while the proportion of the world’s population living in extreme poverty fell from 46 percent in 1990 to 27 percent in 2005. Global life expectancy increased by 3.5 years between 1990 and 2010, and an estimated 90 percent of the global population will have access to clean water by 2015, up from 77 percent in 1990 (United Nations Secretary General, 2012
United Nations Secretary General. 2012.,Resilient People, Resilient Planet: A future worth choosing., United Nations. High Level Panel on Global Sustainability., New York,. . At the same time, and as demonstrated in this report, business practices that have accompanied economic globalisation have often led to an unsustainable accumulation of disaster risk. Large businesses felt the magnitude of this unrealised risk in the disasters associated with Super-Storm Sandy in 2012 and the East Japan Earthquake and Chao Phraya river floods in Thailand in 2011. Smaller businesses, particularly in low and middle-income countries, are reminded more regularly of the accumulation of extensive risk through recur-
rent disasters that damage the infrastructure on which they depend. As a result, both businesses and governments begin to recognise a new category of toxic assets as an unforeseen consequence of economic globalisation. These toxic assets do not currently appear on their balance sheets.
This recognition has yet to trigger a paradigm shift in the values that underpin business decision-making. Hazard-exposed locations offer comparative advantages, creating powerful imperatives to run the risk. But this risk is slowly but surely appearing on business radar screens, especially when assessing trade-offs between costs and opportunities involved in any new investment.
In recent years, intensive disasters have revealed disaster risks embedded in the contemporary economic landscape. As the ongoing global economic crisis has put a spotlight on hidden risks in the global economic system, these landmark disasters may have contributed to a turning point in business awareness of disaster risks. As such, disaster risk
Chapter 16
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