Thursday, August 2, 2012


Climate as risk management concern?


A headline in the San Jose Mercury News reads:

California prepares for harsh realities of changing climate

The next-to-leed cq paragraph reads:

A series of state-sponsored scientific studies released Tuesday warns that California can expect more scorching heat waves, severe and damaging wildfires, emergency room visits and strain on the electric grid as the Earth continues to warm and sea levels rise along the state's 1,100-mile long coast

Risk management practitioners, a/k/a business continuity practitioners, normally consider severe weather conditions as recognized threats to "business as usual."

Most of us, however, fail to crystal ball gaze to try an predict what our clients will be facing 10 or 20 years in the future. The question is: Should we (look far into the future for our clients)?

My answer is a definite "Maybe."

In the U.S., too many "long-range" business plans end after 5 years; some don't even make it that long. Given that, I suggest that practitioners limit serious risk concerns to the length of the long-range business plan.

That does not, however, mean to ignore scientifically-based environmental predictions.

For many years the standing joke has been to "buy property in Nevada; it will soon be oceanfront property" due to the frequency of earthquakes in California. That may eventually happen, but it is not likely to happen during any current long-range plans.

Lack of water is a problem that may be closer than we realize.


  • the source of the state's water
  • the population growth in the state in general and in the "south of San Francisco" area specifically; even more specifically the Los Angeles and south (San Diego) area
  • climatic concerns, i.e., global warming

Similar concerns apply to Florida. South Florida's primary water supply comes, via canals, from Lake Okeechobee in the central part of the state.

Another concern listed in the Mercury News article was electricity; specifically the competition for available resources.

"Higher temperatures in the next decade means that far more of the state's 37 million people will depend on air conditioning--increasing demand for electricity by up to 1 gigawatt during hot summer months. One gigawatt is roughly the size of two coal-fired power plants and is enough energy to power 750,000 homes" the article states.

Even if the state permits additional power plants to be built and brought on line, the process is complicated and takes years from concept to completion. Add to this the environmental battles again almost all generating plant types - coal, oil, gas, nuclear, and the natural resources - besides fuel - needed for their operation (e.g., nearby water supply). While California has some hills in the north and to the east, the possibility of water-powered turbines is very limited; more so in flat Florida.

To be fair, both states could - if technology ever develops - take advantage of wave-generated power. Water could be provided - if efficiencies ever emerge - from desalinization. Today, neither technology is economically feasible on a mass scale.

If, then, the risk management is to consider potential risks beyond the "immediate" future - 5 years maximum - should the risks' equally potential mitigating factors also be considered?


While "maybe?"

Because most of the potential mitigating factors are beyond the control of the organization; they are within the realm of government.

For all that, it behooves the practitioner to do at least a little research on what might confront the organization in the near - and perhaps not-so-near - future.

Is it wise to build a second facility near the first, or would a distant venue with other environmental concerns be in order? (That is not a given.)

Something to consider.

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