Got it covered? How corporates can manage risk in an uncertain world

Words by TONY WHITEHEAD

California’s new high-speed rail system
California’s new high-speed rail system is due to complete in 2029, connecting 24 stations with 800 miles of track. The rail authority, with WSP as delivery partner, has developed a climate adaptation plan, identifying actions to be taken while recognizing the absence of certainty regarding future conditions. Visualization: California High Speed Rail Authority

“Not usually rocket science,” is how Michael Mondshine describes the actions needed to protect against climate change. Based in Virginia, Mondshine is vice president of sustainability, energy and climate change at WSP and he advises corporate clients, including some of the world’s biggest companies, on climate risk and resilience.

“Governments and municipal authorities need to examine risk top-down, looking at protecting whole cities and infrastructure networks,” he says, “but we take a bottom-up approach when we’re dealing with individual businesses. So, what are the risks to the building where the CEO sits? Are the data centres safe? How secure is the local utility and transport infrastructure?”

While some of the answers can be found from desk studies, Mondshine says that site visits are essential. “It pays to walk around and ask questions. For example, we advise a Fortune 100 company that had a data centre in two adjacent buildings. Each had power back-up and fuel tanks, but they weren’t connected.” When trouble struck and one tank ran empty, the company had to improvise, using fire hoses to transfer fuel from one to the other. “Folks think they have it under control, but often they haven’t asked the right questions. For the price of a pipe they could have significantly improved their resilience.”

One trick that companies regularly miss — “and this is often super-low cost” — is to liaise with municipalities and utility providers to check that local services are secure. “One client was reliant for power on a series of substations that were all on a flood plain. They had never spoken to the local utility about how secure those substations were — which was ‘not very’. They had a huge risk they weren’t even aware of, which was essentially resolved with a few phone calls.”

Companies should take every chance to fix such issues before it is too late, he adds. “The timescales for climate change tend to be decadal, and people use that as an excuse not to do anything yet. But it’s important to realize that although the worst impacts are yet to come, the probability curves have already shifted. The one-in-100-year storm is now one-in-20. The hurricane season starts earlier. So the tails of those curves are longer and fatter.”

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