Understanding Climate Change to Build Sustainable Small Businesses

Business readiness is essential to increase one’s chances of business survival. Ensuring a business is ready for any threat includes preparing for extreme weather. According to a recent survey by AXA Group insurance three out of four respondents believe future climate will become more extreme more often, while only five percent believe the weather will become calmer. 88% of the respondents believe that it is possible to limit the consequences of climate change.  Understanding how climate change might impact your business is essential to making a preparation plan and having it ready to implement when necessary.  

As small businesses are integral to any economy, it is imperative that they develop independent and complementary programs across their industry to stay competitive and afloat in tomorrow’s shifting climates. Since all economies are dependent on this vulnerable sector, development of strong and actionable  response plans is essential to national and global stability.

Recent examples of climate disaster include Hurricane Sandy, the typhoon that precipitated the Fukushima Nuclear Disaster, and the many F5 tornadoes in central Oklahoma. Business Continuity Consulting Oklahoma lighting more severe and frequent climate variations, businesses will need to re-assess and re-engineer their existing disaster risk management practices. The greater and more pronounced the climate change, the greater the disruption to product and service creation and delivery. Unlike larger organizations that tend to adapt to recurrent disruptions, small organizations cannot devote as many resources as frequently. Thus, small organizations must learn how to plan and implement climate change adaptation plans more efficiently and fluidly.

Developing rapid response and implementation plans for increased and more severe climate change are beneficial not just for climate change. Having a plan in place and ready to execute helps small businesses respond to and minimize damages in response to many threats. The same plan that helps small businesses respond to natural disasters can help businesses become profitable by offering technology that helps consumers and other businesses work through a disaster toolkit

There are many things a new or existing climate change response plan can benefit from. Taking into account new weather predictions, business survival plans should implement the following steps:

1. Create a plan:  Developing a plan is essential to know what to do beforehand. When an emergency is imminent, there will only be time for execution.             
2. Insurance:  What is and what is not covered. Based on the organization’s budget, assets, and an assessment of what needs to be covered will help determine the best type of insurance policy.
3. Weatherproofing:  What aspects of the business can and cannot sustain a natural disaster. Looking at purchasing products that come weather-proofed and what existing fixtures need to be weather-proofed is essential to respond effectively to future weather events.       
4. Data backup:  Developing a system to ensure all data is safe in case of a natural disaster. This can include data virtual or site backup.

Each organization has different needs and goals. Therefore, climate change response plans must be individualized for each organization's needs and future goals. While many organizations have planned for short-term needs, planning for long-term needs, in light of rapidly changing weather and the increased frequency of weather disasters necessitates long-term planning. Along with planning, organizations that are able to adapt efficiently will help their organizations survive and thrive despite any emergency, weather or otherwise. More info visit on http://www.dcsplanning.com

Exercising for Safety and Soundness

Yes, for the next year or two your bank examiner may make the mistake of crediting you for exercising your disaster plan when you documented an actual crisis but let’s take a step back and think about this before we consider it a “win”.
Experiencing a crisis or disruption does not meet the standard for exercising your plan and should not be adequate to count as testing your plan for many reasons. Including:

1. Under best practice continuity management guidelines it is clear that establishing and testing an exercise program is not the same as documenting events that threaten or impact the business. These are two separate best practices.
2. FFIEC examination guidelines state “The board and senior management should establish a testing program appropriate for the size, complexity, and risk profile of the organization and its business lines”. Passively experiencing crisis does not demonstrate a testing program has been established and, no matter what the extent of the crisis, will it be appropriate for the size, complexity and risk profile of the organization. In fact, it may be counter productive and make you look unprepared because you didn’t plan a test.
3. Community banks are likely to have experienced 6-12 crises in a year. What makes this one particularly meaningful? Did you document the other ones? What are your standards for documentation?
4. Test objectives were not set or met (no, “survival” does not count) and only one part of your response plan was tested. The “test” was not comprehensive.
5. Since you weren’t planning to experience this problem, exercise controls were not in place when you had it. You can only manage what you measure.
6. Hypothetically, would you consider going to the emergency room because you thought you might be having a heart attack to be an indicator for your ability to deal with stress? Technically the answer is “Yes”. However, that’s certainly no way to live and if this is your common practice then it indicates you don’t really have a good plan for your health. The same is true for your organization. Why have a heart attack to wait to check and see if your blood pressure is too high? It’s easier to use a blood pressure cuff and check your heart rate.

Let’s speak the truth: This is not the attitude of a healthy, mature business and will not, for much longer, meet requirements for safety and soundness.
Now, before you get frustrated, I realize you don’t want to do continuity management this way. You have a LOT on your plate that you’d rather be getting to (call reports anyone?) and you’re just not sure where to get started. So, DCS has set up some fantastic tools to make planning exercising EASY for you! Get excited now and bookmark this for future reference! First, go ahead and log that problem you had on our FREE Crisis Event Log. It’s got a couple of brief questions to help you get down the information you need to learn from and properly document the problem.

Next, use our FREE Strategic Road Mapto get an idea about what a good, well-rounded financial institution can do on to build operational strength. NO, you don’t have to do that big fail-over test right away. We actually recommend against it. Start drilling the little things first. Can you guarantee that you can contact everyone when they’re not at work? Try your call tree out and write down what happens. That’s a great test!
Another quick tip is to see what your IT provider is doing to test regularly. We often find out the IT department regularly tests failover procedures but rarely documents it adequately for oversight or examination requirements. All you have to do is start documenting! It’s easy! You can do that!

We have also started a new product line: DIY Turnkey Continuity. We’re building very strong key kits for your continuity tool case at affordable prices. We’ve started with a data breach kit and will be releasing an exercise kit before the end of the summer. For our BOL friends, we are looking for pilot users to test these at a discounted rate! Private message me if you’re interested. Also let me know what other kits you’re interested in. Pandemic, social media and vendor management are on our list for 2013.
I hope these ideas help out. We realize you are doing everything you can to keep compliant and the business moving in a positive direction. Please let us know what else we can do to make your job easier!

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