The recent images of damage in Florida following Hurricane Ian are heartbreaking and terrifying. What’s scarier still is that at the societal level we don’t have a strategy for how to handle the worsening perils of flooding, wildfires, and extreme heat. Governments don’t have the funds to invest in resilience at a meaningful scale to avert calamity in advance, or to rebuild indefinitely after disasters; regulators and permitting authorities are unlikely to have the political support to say “don’t build there” or, more controversially, to say “move away and don’t come back”; and it’s clear from the inadequacies of payouts that “we will just get insurance” is a highly naïve response to the potential exposures going forward.
Climate Risk Is Growing. Is Your Company Prepared?
Leaders need to prioritize, transfer, avoid, or minimize risk — before the next catastrophe hits.
October 26, 2022
Henrik Sorensen/Getty Images
Summary.
Most people don’t have a strategy for for how to handle the worsening perils of flooding, wildfires and extreme heat. They should adopt a four step process for protecting their property, whether it be a home or a business. First, they should prioritize how important climate risk is compared to other risks. Then, they should do whatever they can to transfer climate risk to others; classically, this can be done through insurance. Next, they should take steps to avoid exposure, either by relocating or selling their property. Finally, they should take steps to minimize damage following a storm or wildfire by “hardening” their property, rehearsing and refining their prepared response in the case of an emergency and putting in place a plan to rebuilt (by, for instance, having prior arrangements with remediation companies and builders). Families, organizations, and businesses need to assess how big these exposures really are for them — and act now to prioritize, transfer, avoid, or minimize before the next “big one” hits.