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Making climate change real – lessons from SME’s. Resilience of SMEs against extreme weather. Bingunath Ingirige, Keith Jones, Gayan Wedawatta and Fuad Ali. CREW Final Conference, RICS, London 25 th November 2011. Vulnerability. Stake-holder. Resilience. Adaptive Capacity.

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Presentation Transcript
slide1

Making climate change real – lessons from SME’s

  • Resilience of SMEs against extreme weather
  • Bingunath Ingirige, Keith Jones, Gayan Wedawatta and Fuad Ali

CREW Final Conference, RICS, London

25th November 2011

background theory

Vulnerability

Stake-holder

Resilience

Adaptive Capacity

Background Theory

What do vulnerability, resilience and adaptive capacity mean to SME’s?

What affects a SMEs response to extreme weather events?

What can be done to better prepare SMEs?

SME’s

Community

Resilience

Policy Makers

Households

field study with smes
Field study with SMEs

Questionnaire survey involving 140 SMEs

  • Conducted with the assistance of Federation of Small Businesses (FSB)
  • Located in Greater London
  • Top management of the SMEs as survey participants

Interviews with 12 SMEs

  • Mainly focused on flood risk
  • Majority were micro businesses (less than 10 employees)
  • 4 had previously experienced a flooding event
past experience
Past Experience

Sixty percent of respondents had experienced EWEs (2005 – 2009)

Of these, 84% had experienced business disruption

Very few of these had implemented coping measures

perceptions of risk
Perceptions of risk

Many believed that EWEs did not pose a significant business risk

  • This belief was higher amongst those who had experienced an event

And that it is too costly and complicated to prepare for

They mainly relied on insurance to recover if an EWE affected them

Twelve percent did not expect assistance from anyone

case studies of smes sme4 affected by flooding still no resilience measures except insurance
Case studies of SMEs – SME4Affected by flooding, still no resilience measures except insurance

Event

Consequences to the Business

Impact

Heavy rainfall

(Flash) Flooding of workshop/outlet

Cleaning and dehydration costs

Repair and restoration costs

Stock relocation costs

Loss of customer base

Difficulties involved with assessing and claiming insurance

6 Months without business

Damage to stock

Damage to business premises

Loss of trading/income

case studies of smes sme3 affected by flooding implemented resilience measures
Case studies of SMEs – SME3Affected by flooding, implemented resilience measures

Event

Consequences to the Business

Impact

Heavy rainfall

(Flash) Flooding of workshop/outlet

Delay in supplying orders

3 Months without business

Damage to stocks and equipment

Damage to business premises

Loss of paperwork

Complete damage not met by insurance

Loss of trading/income

Loss of records

Repair costs

Increased Insurance premium

case studies of smes sme3 affected by flooding implemented resilience measures1
Case studies of SMEs – SME3Affected by flooding, implemented resilience measures

Resilience measures

Event

Consequences to the Business

Impact

Heavy rainfall

(Flash) Flooding of workshop/outlet

Online data backup system

Raised storage

Delay in supplying orders

3 Months without business

Damage to stocks and equipment

Damage to business premises

Loss of paperwork

Complete damage not met by insurance

Loss of trading/income

Loss of records

Repair costs

Increased Insurance premium

case studies of smes sme3 affected by flooding implemented resilience measures2
Case studies of SMEs – SME3Affected by flooding, implemented resilience measures

Resilience measures

Event

Consequences to the Business

Impact

Heavy rainfall

(Flash) Flooding of workshop/outlet

Online data backup system

Flood barrier

Raised storage

Delay in supplying orders

3 Months without business

Damage to stocks and equipment

Damage to internal premises

Loss of paperwork

Complete damage not met by insurance

Loss of trading/income

Loss of records

Repair costs

Increased Insurance premium

challenge make the risks real
Challenge: Make the risks real

Language is critical

    • Business find it difficult to recognise and interpret climate change stimuli and as such assess their vulnerability to future events.

Business Continuity Planning is weak

      • Don’t see the need for any additional preparation.

Personal attitudes are significant

    • Organisation’s find it difficult to assess the advantages and disadvantages of alternate adaptation strategies, which invariably have up-front costs associated with them.

How much should you spend (time & money) preparing for an event that hasn’t happened and may might not happen?

  • Adaptation is business centric not climate centric
    • Need to phrase adaptation in terms of business risk
risk assessment framework
Risk Assessment Framework

The risk assessment framework has been developed through a series of projects with private and public sector organisations to assist businesses assess their vulnerability, resilience and adaptive capacity to climate change.

Then example is drawn from a social housing provider.

current conditions
Current Conditions

Current Conditions

Examine recent history and identify disruption caused by extreme weather events

Analyse each event and identify inherent vulnerabilities and resilience of the system (social, physical, economic, legislative).

future scenarios
Future Scenarios

Future Scenarios

Develop future scenarios, based on climate change predictions, that cover the range of possible impacts of future events

Assess vulnerability and resilience of existing systems against each scenario(social, physical, economic and legislative)

risk appraisal
Risk Appraisal

Risk Appraisal

Rate each system component according to impact (matrix of vulnerability against coping capacity

For high impact components identify what can be done to prevent disruption or improve the recovery process of the system

Cost each measure

(£, human resources, skills etc)

contingency planning
Contingency Planning

Contingency Planning

Assess the ability of the system stakeholder to fund/manage the coping measure (quantify the absorptive/adaptive capacity)

Prioritise coping measures to optimise absorptive capacity

Develop adaptation plans

integrate into building life cycle
Integrate into building life cycle

TSB project to integrate the risk framework into an adaptation strategy within the building life cycle.

thank you questions
Thank You - Questions

www.extreme-weather-impacts.net