October 26, 2022
Article
Harvard Business Review Digital Articles

Climate Risk Is Growing. Is Your Company Prepared?

Format:Electronic

Abstract

Most people don’t have a strategy for how to handle the worsening perils of flooding, wildfires and extreme heat. They should adopt a four-step process for protecting their property, whether it be a home or a business. First, they should prioritize how important climate risk is compared to other risks. Then, they should do whatever they can to transfer climate risk to others; classically, this can be done through insurance. Next, they should take steps to avoid exposure, either by relocating or selling their property. Finally, they should take steps to minimize damage following a storm or wildfire by “hardening” their property, rehearsing and refining their prepared response in the case of an emergency and putting in place a plan to rebuild (by, for instance, having prior arrangements with remediation companies and builders). Families, organizations, and businesses need to assess how big these exposures really are for them—and act now to prioritize, transfer, avoid, or minimize before the next “big one” hits.