Local businessmen were urged to build awareness toward increasing private sector resilience, amid increasing risks from natural disasters that have recently accounted for a larger share of business losses, speakers at a leaders’ forum said Friday.
The Top Leader Forum, led by the United Nations Office for Disaster Risk Reduction (UNISDR) and the Sy family’s SM Prime Holdings Inc., was aimed at addressing the current resilience rating sytems to increase shareholder value and coming up with incentives to stimulate so-called “resilient investments.”
The main message was that companies that are proactive and invest in their resiliency to reduce disaster risk can grow, post-disaster, while competitors that fail do the same fall behind.
Still, the concept was challenging because it was still considered “relatively untested” in many parts of the world, Margareta Wahlström, Special Representative of the Secretary-General for Disaster Risk Reduction, said in a press conference Friday.
Asia, for example, accounts for half of the world’s estimated economic cost of disasters over the last two decades, according to briefing materials citing figures from the Asian Development Bank.
Of the total economic cost, only 5 percent are insured, it added.
“Up to now, very few corportaions, big or medum-size, have actually invested in resiliency. They invest in managing risks, reputation risks, hazards. [But] disasters, no,” Wahlström said.
SM Prime president Hans Sy likewise noted that building up awareness was the key to this, citing his travels in a Philippine province where communities were building homes on a potentially unstable sand bed.
“No amount of regulation can help the situation. It all starts with awareness. Just knowing where you can build is an area that can help a lot of people,” Sy said.
Closer coordination with smaller businesses was also important, given that most of the country’s enterprises fall under this category.
“We need to work hard with the SMEs (small and medium enterprises) in terms of awareness and looking at resilience investment as way to improve protection against the prospect of bankruptcy in a disaster,” Wahlström said.
“How do we make sure we have backup systems so we don’t lose accounting, all our paper, our legal existence. Also how do we engage with communities so we can help each other in times [of need].” Wahlström added.
“It’s more of a mentality change,” she said.
This is the second consecutive year that the UN, in partnership with SM Prime, held the Top Leaders’ Forum, which drew over 30 CEOs and top managers from the region.
The event was also timely as it came in the aftermath of Supertyphoon Yolanda, which barreled through the Visayas last Nov. 8, killing thousands and causing significant damage to infrastructure.
The United Nations International Strategy for Disaster Reduction is a strategic framework adopted by the United Nations member states, aiming to guide and coordinate efforts related to reducing disaster losses and building resilient and sustainable communities.