Dr. Peter Williams: “Smarter businesses are tapping their cities on the shoulder”
Is the COVID-19 pandemic a dry run for the disruptions that climate change has in store? Assuming this is the case, Dr. Peter Williams, lead author of the UN City Disaster Resilience Scorecard, knows what the “smarter businesses” are doing.
“They are tapping their cities on the shoulder and saying, ‘Oh, come on, what's going on? What are we doing to address the risks we face?’ For example, the US Navy realizes that their naval base facilities around Newport News and Chesapeake Bay are at risk from climate change. They realize that, like it or not, they're part of the community and they have got to work with the community to [manage risk].”
Dr. Williams, former CTO of IBM's Big Green Innovations unit, created the Scorecard to allow local governments to assess their resilience in the event of disasters. Yet it is much more than a tool for municipalities to use in a silo. To generate a score involves engaging a multi-faceted community, from city planners to business leaders.
When it comes to business leaders, Dr. Williams’ advice is straightforward: “Throw some straws in the wind, take a look at the way trends are going and then start to ask yourself: how are you positioned? What are you critically reliant upon?”
For example, workforce and energy supply are two factors of critical reliance for virtually all organizations.
“In the aftermath of a disaster, can your employees physically get to work? Have you got a reliable energy supply, and then a reliable backup energy supply?”
Answering these questions necessitates what Dr. Williams calls “consensus building” discussions between key members in a value network.
“The majority of cities [that have used the scorecard] have used it as a vehicle for getting the right people in the room to start talking about resilience. I've run a number of those consensus building workshops and without fail, by getting people in the room you encourage conversations to happen that perhaps should have happened years ago.”
Dr. Williams gives an example: “One chief planner was talking about plans for the development of the city. And he said, ‘Yeah, we're going to have high density, transit-oriented development.’ And the head of emergency management’s eyebrows shot way up past his hairline and he said, ‘So, wait a minute. There's gonna be 9,000 people that I'll have to evacuate because they don't have their own cars?’ Nobody had told him before that moment.”
The consequences for failing to pursue these conversations and work towards communal resilience are dire—especially economically. Dr. Williams offers up New Orleans as a cautionary tale.
“New Orleans only ever recovered to about 75% of its economic activity pre-Hurricane Katrina. If your brain is starved of oxygen, it can put up with that for a little while, but then, you know, it's slowly going to damage itself, and eventually you're going to die. Well, if you have a disaster and your city central business district shuts down, then unless you invest enormous amounts of money in it, some of the small businesses in that city that only have three or four days’ worth of cash flow are never going to come back again. New Orleans basically had an economic stroke.”
Dr. Williams notes that the investment sector is beginning to reflect this climate risk realism, even if many business leaders are lagging. The importance of “materiality, the risks that are material to your business” mean that “increasingly, you're being held to account by regulatory authorities around the world to demonstrate that you plan for disasters. If the risk is material and you haven't dealt with it, all other things being equal, sooner or later, that's going to show up and you start pricing it in your cost of capital.”