The Impact Climate Change has on Logistics

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The risk of climate change related business interruption is substantial and often treated as if it were zero.  If a company prices this risk, there will be funds available for investing in strategies to prepare for and respond to business interruption caused by increasingly intense weather events as the climate changes.

All businesses plan for business continuity, but the world we know is changing.  The frequency and severity of storms is increasing, and new types of catastrophic weather events are more common and more devastating (floods, tornadoes, drought, fire, fierce winds and destructive hail or other precipitation).

These catastrophic events can interrupt business, destroy infrastructure, manufacturing and other facilities, fleets and equipment as well power.  It can take days, weeks, months or years to recover public infrastructure and private assets.  In the meantime losing millions or even billions of dollars of sales, much less the direct costs of recovery.

Because of the politicization of the topic of climate change, many businesses have not implemented a strategy to address the profound changes that they are witnessing.  Uncertainty about when and where weather events will occur and their severity and impact make this a very complicated challenge.

Climate science indicates that the changes are real and likely to result in increasingly severe weather and changes in precipitation, sea level, and extended heat waves.

Weather systems are chaotic and may be getting even harder to predict with precision and sufficient advanced warning for nimble response.

Therefore, companies need to consider investing in proactive strategies to protect themselves from the business consequences of natural disasters.

What can companies do? This was the subject of my presentation at  Sustainable Silicon Valley West Summit 2012.