“We need to step up investment in risk reduction, prevention, and preparedness – the most effective ways to reduce disaster losses.” —António Guterres, United Nations Secretary-General

Many corporate executives delay or avoid budget spending in risk resiliency because of a universal belief that there’s no ROI, especially if a negative, disruptive event never happens. Investing in business continuity can help companies minimize the impact of these disruptions and maintain their operations, thereby minimizing losses and maintaining customer confidence. Consider current global trends putting operational resiliency at risk:

1. Increasing frequency and intensity of natural disasters: Climate change is causing an increase in the frequency and intensity of natural disasters such as hurricanes, floods, wildfires, and droughts. This trend is expected to continue as global temperatures continue to rise.
2. The growing vulnerability of populations: As the world’s population grows and becomes more urbanized, more people are living in areas vulnerable to natural disasters such as earthquakes, landslides, and coastal flooding. This trend is compounded by poverty, inequality, and weak infrastructure.
3. Economic losses: Disasters are causing increasingly significant economic losses globally. In 2020 alone, the economic impact of natural disasters was estimated at over $210 billion, with only a fraction of this amount insured.
4. Impact on human life and health: Disasters are also having a significant impact on human life and health. In 2020, over 8,000 people died in natural disasters globally, and millions more were affected by displacement, injury, or loss of livelihood.
5. Need for disaster risk reduction: The growing threat of disasters has led to a growing recognition of the need for disaster risk reduction measures. This includes investing in resilient infrastructure, early warning systems, and community-based disaster preparedness. The adoption of the Sendai Framework for Disaster Risk Reduction by the United Nations in 2015 represents a global commitment to reducing disaster risk and building resilience.

When it comes to calculating ROI for business continuity investments, there are several factors to consider. First, companies should closely evaluate the potential costs of disruptions to their operations. This can include lost revenue, and increased expenses—not to mention potential damage to a company’s reputation/brand. By investing in business continuity, companies can minimize these costs and potentially avoid them altogether.*

“Investing in disaster risk reduction is not only a moral imperative but also makes economic sense.” —Mami Mizutori, Special Representative of the United Nations Secretary-General for Disaster Risk Reduction

Companies should consider the cost of implementing business continuity measures. This can include the cost of technology, training, and hiring additional staff to manage business continuity plans. Companies should weigh these costs against the potential savings and benefits of avoiding disruptions and maintaining operations. Remember this: For every dollar invested in climate-resilient infrastructure and resiliency, six Dollars are saved.”

All companies in any industry, size, or geographic area should consider the potential long-term benefits of investing in a culture of business continuity. This can include increased customer loyalty and trust, improved brand reputation, and a competitive advantage over companies that have not invested in business continuity.

“We need to invest more in disaster risk reduction, not only in response to disasters but also in building resilience and preparedness.” —Rachel Kyte, Dean of The Fletcher School at Tufts University and former CEO of Sustainable Energy for All.

But here’s a new twist: Overall, investing in business continuity can have a positive ROI for companies, particularly those that operate in high-risk industries or locations. However, the specific ROI will depend on the nature of the business, the potential risks and costs of disruptions, and the cost of implementing business continuity measures. But in a post-pandemic world, larger customers, particularly Fortune 1000 companies and government agencies are requiring active and tested business resiliency plans from their vendor relationships.

*United Nations Secretary-General Says in Message for Disaster Risk Reduction Day