The Business Case for Resilience

H/t Markus Spiske

The Four C’s in the Boardroom

Recently, we had the opportunity to speak with more than 80 companies — nearly all global and Fortune 500 firms — in finance, manufacturing, logistics, transportation, energy, and consulting. Our main topic was essentially what keeps you up at night — what’s your One Concern?

  1. Cyber and civil unrest are covered but what about climate and COVID? Most of the Boardroom and C-suite executives we spoke with told us that they felt they had tools and resources to manage cyber risk and protect employees from civil unrest, but felt ill-prepared to manage climate risk and pandemic risk. In fact, many of the companies we spoke with, who have made net-zero carbon commitments, privately admit that they have no clear plan for how to manage those commitments or no clear view on how much it will cost over time. They’re leaning on consulting firms to navigate the way.
  2. Employee safety is the number one concern. In a world turned on its head by the pandemic, employee safety is the primary concern for large enterprises. Last year’s dramatic shift to a virtual workforce meant that employers wanted to ensure that their employees were safe no matter where they worked.
  3. Large enterprises have the resources — and motivation — to invest in resilience. Whether it’s regulatory pressure from financial regulators, increasing ESG pressure from shareholders, or simply reputational risk, these companies want to get ahead of it and are willing to invest in resilient solutions that protect the bottom line, and in our view, will ultimately grow the top line.
  4. What about unknown risks “outside my fence”? COVID-19 has exposed vulnerabilities that organizations had not previously considered to be a threat, and thus had not incorporated into wider resilience planning. In particular, organizations were not prepared for the cascading impact of an unknown risk — such as a pandemic — to their operations, whether through reduced sales, disrupted supply chains, or displaced workforces. It’s these unknown risks “outside the fence” that are driving enterprises to re-jigger supply chains, invest in on-premise microgrid solutions to keep the power on, or look for public-private partnership opportunities to improve public infrastructure.

The Global Infrastructure Deficit

Most enterprises have historically looked to governments to take the lead on climate action, the development of climate-resilient infrastructure, and the inevitable post-crisis clean-up.

The Intersection Between Resilience and Sustainability

We see the world as a graph database where buildings are “nodes” and the infrastructure that connects them are “edges.” It’s how we’ve built our “digital twin” for the US and Japan. Break a node or an edge with extreme weather and you can see the domino effect that occurs. It’s exactly what we saw in Texas earlier this year due to an “unforeseen” cold spell that froze the grid. The only thing is, Texas had experienced similar cold spells in the past, but they didn’t invest in resiliency to prevent the cascading effects from occurring.

Final Thoughts

In any hot market, there will be winners and losers, innovators and imitators, champions and skeptics. One thing that we’ve learned in the six years that we’ve been building this company, is to stay focused on our view that investing in resilience makes business sense. With the impact of climate change costing billions more each year, we believe the economic, market, and regulatory tailwinds blow in our favor.

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One Concern

One Concern

We’re advancing science and technology to build global resilience, and make disasters less disastrous