Enroll Business to Cut Disaster Risk

Business District

By Mami Mizutori, Special Representative of the Secretary-General for Disaster Risk Reduction and Head of the United Nations Office for Disaster Risk Reduction

From micro family-run ventures to giant multinationals, companies are often hard hit by disasters that erode their bottom line or force them out of business altogether.

But while companies have much to lose, they have a huge amount to offer, so it is vital that we better engage the private sector if we are to reduce disaster risk and ensure our fast-growing cities become resilient.

To make progress on the targets of the Sendai Framework for Disaster Risk Reduction to reduce economic losses and damage to critical infrastructure and disruption of basic services, we need the private and public sectors to work together.

And as climate change ramps up the intensity and impact of devastating extreme weather events, from hurricanes to floods and droughts, the pressure is on.

Every year, $520 billion dollars are lost globally as a result of disasters, and for some low-income countries, disasters can cost up to 100 percent of gross domestic product (GDP).

When it comes to overall investment, up to 85 percent comes from the private sector which means companies automatically play a major role in how new risk is created, and avoided, particularly in hazard-exposed urban areas.

At the United Nations Office for Disaster Risk Reduction (UNDRR), we are actively working with the private sector since the creation in 2015 of ARISE – The Private Sector Alliance for Disaster Resilient Societies – which is rapidly growing and forming new networks around the world.

From India to the United States of América and Mexico, ARISE member businesses are practically working to incentivize investment in long-term risk-reduction and resilience and build back better if, and when, disasters do hit.

While we believe it is crucial to invest in low-risk infrastructure, resilient homes and communities, we also need to find affordable ways to use the financial markets to insure and protect these investments against future disasters.

So far, we're seeing some positive developments.

Mexico, for example, has established Catastrophe Bonds that transfer risk to the capital markets; the Caribbean Risk Insurance Facility is the first parametric, regional scheme which allows countries to pool their premiums.

Ensuring our future cities are risk-informed and resilient may seem costly, but the cost of doing nothing is far greater. Let us work together across the private and public sectors, combine experience and resources, and reduce disaster risk. Businesses and communities will see the benefit.