The United Nations has warned the global business community that the economic losses linked to natural disasters are ‘out of control’.
Earlier this month the United Nations warned the global business community that the economic losses linked to natural disasters are ‘out of control’ and will only increase without more focus on disaster risk management.
Direct losses from disasters throughout the previous century have generally been underestimated by half, according to UN secretary general Ban Ki-Moon, and actually stand at $2.5 trillion USD.
“Economic losses from disasters are out of control and can only be reduced in partnership with the private sector … [t]he principles of disaster risk reduction must be taught at business schools and become part of the investor’s mind-set,” Ban said at the launch of a new report from the UN Office for Disaster Risk Reduction (UNISDR).
The new report, the 2013 Global Assessment Report on Disaster Risk Reduction (GAR13), is based on the review of national disaster loss databases in 40 countries and of the risk management practices in 14 major corporations, as well as a survey of 1,300 SMEs in disaster-prone locations in the Americas. The research suggests that changes in the global economy over the last half century, such as globalisation and the removal of businesses to hazard-prone locations, have led to rapid increases in disaster risk across the globe.
The UNISDR teamed with PwC in undertaking some of the research and analysis. Oz Ozturk, PwC partner, observed that senior executives were ‘increasingly aware’ of the risks disasters posed to business, and were beginning to pay more attention to disaster risk management. “For the private sector, the business case for stronger disaster risk management is clear: it reduces uncertainty and builds confidence, cuts costs and creates value,” Ozturk said.
“The beginnings of changing attitudes in the private sector now need to transform into a more systematic approach to disaster risk management in partnership with the public sector to make the world a safer place,” UNISDR chief Margareta Wahlström, who was also at the launch, said.
