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Business continuity

‘Every business continuity manager has a duty to assess the risks and to determine the threats to their organisation. Business continuity is about the long-term survival of your organisation and climate change may be one of the biggest threats you face.’ (David Honour, Continuity Central)

Costs of climate change

The costs of flooding

  • According to the Environment Agency, almost 7000 businesses in the UK were affected by flooding in 2007. The majority of these businesses incurred considerable costs in recovering from the water damage and the loss of income.
  • The Association of British Insurers (ABI) estimates that the floods of 2007 cost insurers around £3bn.

The costs of increasing temperatures

  • In the past, heat waves in the UK have disrupted the energy-distribution infrastructure, as well as road, rail and underground networks due to excess heat.
  • Increasing temperatures interrupt businesses because people suffer from heat stress when working in buildings not constructed or retrofitted to keep cool during heat-waves.
  • NHS admittances due to food poisoning are shown to rise significantly with each degree of temperature rise: 4,000 extra cases when temperatures rise by 1º C, and 14,000 extra cases with a 3º C temperature rise. (Dr Verne, SW Public Health Observatory)
  • Increases in average temperatures and mild winters also allow diseases (water and tick-borne) to spread at increased rates and to parts of the UK where such diseases have not been present before.

Business continuity

A business continuity plan (BCP) that takes into account climate-change impacts will become more important as these events become more frequent. If businesses ignore the impacts of climate change and the need to adapt, they run the risk of:

  • Reduced productivity: from interruption of business operations, knock-on effects of disruption from essential suppliers
  • Loss of reputation
  • Loss of essential data and records
  • Failure to meet duties and legal obligations.

Why include adaptation in Business Continuity Planning (BCP)?

Considering the impacts of climate change and adaptation actions can reduce the risk of business interruption and associated costs.

While no single event can be attributed to climate change, the climate scenarios provided by the United Kingdom Climate Impacts Programme (UKCIP) predict similar events with increasing frequency and possibly increased intensity. Businesses and governments can use UKCIP’s projections and associated probabilities to make more informed decisions about how to prepare for such events.

Adaptation measures

Businesses need to ask themselves what climate-change impacts are most relevant and necessary for them to consider in BCP, and then assess what adaptation actions they need to take.

Larger practices should carry out a Business Area Climate Impacts Assessment (BACLIAT), which involves:

  • reviewing the core areas of the business, identifying the threats and opportunities
  • considering the costs of past impacts to the business, indicating priority risk areas for BCP planning.

If the practice identifies critical thresholds that, once exceeded, would result in significant interruption to its business, it should review its BCP once the forthcoming UK Climate Projections are made available. This may mean that certain aspects of a BCP become more important to the practice than they are currently.

Adaptation measures businesses can take

Flooding

  • Find out whether the business is at risk of flooding. Warnings are available from the Environment Agency whenever an alert is issued in the area.
  • Develop a flood plan showing:
    • key equipment
    • protective materials
    • service shut-off points.
  • Check existing insurance policies and range of cover.

Extreme temperatures

  • Extremes of temperature can exacerbate existing medical conditions (for example high blood pressure, heart disease, epilepsy and diabetes). Use medical questionnaires to identify those employees at risk so that you can build this into your risk assessments and develop suitable management controls.
  • Provide adequate building-cooling systems that take into consideration increased future cooling demand. Installing air-conditioning is not the ideal solution as it:
    • leads to increased energy demand
    • increases carbon emissions.

    Instead, ensure employees are situated away from sources of radiant heat and investigate and implement alternative building-cooling methods such natural ventilation and shading.

Relevant UK policy, legislation and standards

UK Companies Act - Operating and Financial Review guidelines (CA2006):
These guidelines require companies to take account of all risks to business and a legal obligation to consider the environment when taking business decisions.

Solicitors’ Code of Conduct 2007:
Rule 5.01 states that ‘… you must make arrangements for the effective management of the firm as a whole, and in particular provide for: the continuation of the practice of the firm in the event of absences and emergencies, with the minimum interruption to clients’ business; and the management of risk’.

The Civil Contingencies Act 2004:
This Act places statutory duties on local authorities to extend their civil-protection duty beyond emergency planning to address risks to local businesses.

British Standard: Business Continuity BS25999:2
Issued by the British Standards Institute it aims to ensure the continued operations of a business in the event of business disruption by reducing disruption risks. It provides a foundation for developing and implementing a business continuity plan in any UK business and is a specification that can be audited against.

Produced in association with Ecofys UK Ltd