Tidal Waves of Disruption
Climate Change and Business Continuity in the Caribbean
By Marise K. Johncilla - Principal Consultant | The Serenon Group Limited – OSH and Business Continuity Consultancy
& Member of AMCHAM T&T's HSE Committee
.

LINKAGE Q3 (2024) - OPPORTUNITY IN ADVERSITY

Introduction
Hurricane Beryl created many worrisome “firsts” for the 2024 Hurricane Season— firsts that would likely evolve into a series of trends for future hurricane seasons that may inevitably have deleterious effects within the Caribbean region.

Beryl “stormed” into the hurricane season by smashing historical records, starting with being the first hurricane of 2024 that developed from a tropical depression to a formidable hurricane within a 42-hour period, but more alarmingly, being the first Category 4 storm to form in the month of June, farther east than any other June hurricane on record, and then rapidly intensifying to a Category 5 storm while still in the Atlantic Basin. The latter, while unprecedented for the month of June based on historical records, can now be considered in alignment with concerning trends for rapid intensification of these storms, as observed in October 2023, where Hurricane Otis morphed from a tropical storm to a monstrosity of a Category 5 hurricane within a 24-hour period.

This article outlines the stark realities of the risks of potential human, operational and economic loss arising from both the (predictably) direct and indirect consequences of climate change within the Caribbean in the absence of robust business continuity planning and management.

Climate Change in the Caribbean
Within one year, alarming climate-related precedents have been set. Fingers are pointing to climate change, which poses an “existential threat” to the Caribbean’s Small Island Developing States that are disproportionately exposed and becoming increasingly vulnerable to the impacts of climate change. These impacts are expected to intensify, and the Caribbean region in particular faces an uncertain future. The unique susceptibility of the Caribbean region to climate-based impacts makes for a compelling case for the establishment of robust business continuity planning and management within both the public and private sectors, bringing into sharp focus the critical need for proactive strategies to mitigate against these risks.

The Caribbean collectively contributes 0.3% of global CO2 emissions; however, the emissions per capita increased from 3.5 tonnes to 5.1 tonnes within a 29-year span. The correlation between the increase in CO2 emissions and changing weather patterns cannot be ignored, with ocean heat levels being at record highs over the past 14 months. The sustained heat patterns have undoubtedly acted as catalysts for climate change, contributing to supercharged weather systems, inevitably altering global weather patterns with profound implications for businesses including business and operational disruptions due to physical damage, displacement of people, and financial losses. Climate-based disruptions will inevitably result in a regression of socio-economic development within the Caribbean, like the effects of Hurricane Maria in 2017, which cost the island of Dominica a staggering 800% of its GDP.

Superstorms are not the only by-product of climate change. Rising sea levels pose a serious threat to the Caribbean’s unique geographic features, which act as the cornerstone of many Caribbean economies that are heavily dependent on tourism.

In addition to directly impacting tourism, rising sea levels will inevitably impact critical infrastructure (such as coastal/port infrastructure, marinas and fishing facilities etc), transportation networks and coastal-dependent businesses, in addition to loss of land and contamination of freshwater resources, all of which will inevitably impact the continuity of operations—and the bottom-line. Altered global weather patterns may also create prolonged drought periods or conversely unprecedented rainfall within the Caribbean, which may be particularly disruptive to the agricultural sector, potentially creating food supply disruptions and generally reducing food security within the region.

Risk Management
The undeniable negative operational and fiscal impacts to the Caribbean due to climate change underscores the need for robust business continuity planning in both the public and private sectors. While managed disaster management responses are aimed at providing support to the emergency relief efforts in the aftermath of a serious climate-related event, proactive business continuity related strategy development is now not just a mere suggestion, but a necessity within the region to ensure that businesses can continue to operate during and after a climate-related disaster. For example, Caribbean states should call for the harmonisation of sound national and regional building codes, co-created from collaboration with the private and public sector, as part of disaster risk reduction strategies. Identifying, assessing and managing the associated risks of climate change should now be embedded into organisational strategic planning to determine the best cost-beneficial strategies to mitigate against the identified climate-related risks.

Businesses must also consider the financial risks due to climate change, which may increase the cost of borrowing, reducing growth and undermining fiscal sustainability. Business financing options should include aspects of disaster risk reduction that are aligned to ensure infrastructural resilience.

Emergency Response Planning
Organisations should also consider the need to create, or enhance existing, emergency response plans that incorporate climate-related emergencies. Businesses in the Caribbean can no longer afford to consider “standardised” emergency planning. They must incorporate short- and long-term climate-related emergency planning with integrated communication protocols, roles and responsibilities as well as additional resource allocation. Climate-related emergency scenarios should also be incorporated into emergency drills and rehearsals, so that all stakeholders can be prepared to react and respond accordingly.

Business Impact Analysis
Business impact analyses allow for the comprehensive assessment of potential disruptions arising from climate-related impacts. Businesses can identify or clarify critical functions and business processes, along with more precise estimation of potential losses if the likely impacts are realised. This in turn would drive more appropriate climate change-related risk reduction strategies. An expansive business impact analysis will help organisations prioritise the allocation of adequate resources to mitigate against potential climate-related threats, ensuring the continuity of operations before and during an event, with the development of business strategies commensurate with the business impact analysis to buffer the impacts of the threats.

Are businesses aware of their recovery time objectives or minimum business continuity objectives? Can businesses resume at 50% or 75% capacity? These critical aspects of business continuity must be considered when analysing impacts to operations. Businesses must also consider the tremendous risk of climate-related disasters, which are the largest contributors to corporate insurance losses. The costs of natural disasters are expected to skyrocket with the increase in natural disasters globally – as seen in the shift in costs of annual losses over a 10-year period from US$74 billion to US$123 billion. Anticipating the impacts of climate-related disasters and focussing on implementing appropriate disaster risk reduction strategies should be a key corporate driver in strategic planning.

Use of Technology & Protection of Data
Businesses are becoming increasingly reliant on using technology and data in their operations. Therefore, they must secure technological assets and protect critical data in the event of a climate change-related impact. Resilience includes ensuring third-party systems and application providers can provide continuity of service or operations – the Cloudstrike programme disruption and global Windows system outage in July 2024 is a stark reminder of how reliant the global community is on technology and data.

Investing in redundancy systems to support IT and data protection should be considered by businesses when analysing climate-related impacts to operations. In the aftermath of Hurricane Beryl there were no forms of communication in or with Carriacou, as the mobile networks were disrupted. however, some entities, including first responders, were able to access direct satellite-hosted networks to maintain communication. Businesses heavily reliant on technology and internet hosted services should consider the immense value in investing in two-way satellite-based internet services (such as that provided by Starlink) as part of their communication redundancy systems to mitigate against any disruptions in a disaster.

Stakeholder Collaboration & Engagement
There is the added value of incorporating stakeholder collaboration as part of robust business continuity planning process as this relates to climate-related impacts, involving employees, customers, suppliers, and key local and regional governmental authorities, for the purpose of forging ironclad relationships that would be mutually beneficial in times of crisis. Enhanced positive relationships increase capacity and resilience when faced with impacts to operations, with the added benefit of coordinated response mechanisms being deployed in a timely manner when required. Increased collaboration can also provide additional valuable resources and support in building climate change-related resilience and disaster preparedness.

Building Resilience & Sustainability
Businesses within the Caribbean are at high risk for climate-related challenges and impacts to operations, and there is a surging need for these businesses to embrace a more proactive approach in developing and implementing sound principles of business continuity planning and management. The goal of resiliency in times of climate-related crises should be driven by the need to integrate sustainability across all aspects of business operations and strategies. By incorporating sound principles of sustainability in business models, the Caribbean business community can proactively monitor, anticipate and mitigate against the harmful effects of climate change. Businesses should consider leveraging available digital tools in the enhancement of operational resilience in business continuity planning and management and embrace the use of predictive analytics and artificial intelligence for horizon scanning and risk mitigation.

Diversification & Developing a Culture of Resilience
Climate change-related threats to the Caribbean have highlighted the urgent need for a transformational shift away from the traditional singular dependencies on industries such as tourism or petrochemicals, and to encourage the diversification of streams of income to buffer against any potential (and perhaps inevitable) climate change-related economic shock. Investing in increasing a culture of resilience can also be a critical strategy for Caribbean businesses and governments to consider, as this equips businesses, their employees and the wider population with the necessary skill sets and tools to promote continuity of operations on all levels.

Conclusion
In conclusion, the Caribbean is especially vulnerable to the impacts of climate change that are being experienced in real time year after year. Hurricane Beryl again has reminded the region of the level of overexposure to climate change-related impacts. With at least 55 fatalities recorded from the passage of Beryl through the Caribbean and to North America, this hurricane was an unembellished reminder of the current realities faced by many at risk communities. In Saint Vincent and the Grenadines 48% of the population was considered vulnerable and exposed, with 38% in Grenada and 20% in Jamaica, corresponding with US$2.29 billion in capital exposure in SVG, US$1 billion in Grenada and US$70.7 billion in Jamaica. While investment in early warning systems is encouraged and may reduce population fatalities, the economic impact of climate change-related impacts to the region cannot be overstated. There is a comprehensive need for bespoke risk mitigation strategies that embed long term resiliency and sustainability in the face of climate disasters, while leveraging the use of appropriate technology and fostering valuable collaboration and resource allocation.

Governments and corporate entities are encouraged to embed business continuity planning and management into internal ESG practices to strengthen long-term business resilience, improve preparedness and strengthen stakeholder confidence. No longer can the Caribbean community view business continuity planning and management as an option – it should be “par for the course” in considering all things climate change-related.

ABOUT THE AUTHOR

Marise K. Johncilla is the Principal Consultant at The Serenon Group Limited – OSH and Business Continuity Consultancy
and a Member of AMCHAM T&T's HSE Committee

LINKAGE Q3 (2024) - OPPORTUNITY IN ADVERSITY

Introduction
Hurricane Beryl created many worrisome “firsts” for the 2024 Hurricane Season— firsts that would likely evolve into a series of trends for future hurricane seasons that may inevitably have deleterious effects within the Caribbean region.

Beryl “stormed” into the hurricane season by smashing historical records, starting with being the first hurricane of 2024 that developed from a tropical depression to a formidable hurricane within a 42-hour period, but more alarmingly, being the first Category 4 storm to form in the month of June, farther east than any other June hurricane on record, and then rapidly intensifying to a Category 5 storm while still in the Atlantic Basin. The latter, while unprecedented for the month of June based on historical records, can now be considered in alignment with concerning trends for rapid intensification of these storms, as observed in October 2023, where Hurricane Otis morphed from a tropical storm to a monstrosity of a Category 5 hurricane within a 24-hour period.

This article outlines the stark realities of the risks of potential human, operational and economic loss arising from both the (predictably) direct and indirect consequences of climate change within the Caribbean in the absence of robust business continuity planning and management.

Climate Change in the Caribbean
Within one year, alarming climate-related precedents have been set. Fingers are pointing to climate change, which poses an “existential threat” to the Caribbean’s Small Island Developing States that are disproportionately exposed and becoming increasingly vulnerable to the impacts of climate change. These impacts are expected to intensify, and the Caribbean region in particular faces an uncertain future. The unique susceptibility of the Caribbean region to climate-based impacts makes for a compelling case for the establishment of robust business continuity planning and management within both the public and private sectors, bringing into sharp focus the critical need for proactive strategies to mitigate against these risks.

The Caribbean collectively contributes 0.3% of global CO2 emissions; however, the emissions per capita increased from 3.5 tonnes to 5.1 tonnes within a 29-year span. The correlation between the increase in CO2 emissions and changing weather patterns cannot be ignored, with ocean heat levels being at record highs over the past 14 months. The sustained heat patterns have undoubtedly acted as catalysts for climate change, contributing to supercharged weather systems, inevitably altering global weather patterns with profound implications for businesses including business and operational disruptions due to physical damage, displacement of people, and financial losses. Climate-based disruptions will inevitably result in a regression of socio-economic development within the Caribbean, like the effects of Hurricane Maria in 2017, which cost the island of Dominica a staggering 800% of its GDP.

Superstorms are not the only by-product of climate change. Rising sea levels pose a serious threat to the Caribbean’s unique geographic features, which act as the cornerstone of many Caribbean economies that are heavily dependent on tourism.

In addition to directly impacting tourism, rising sea levels will inevitably impact critical infrastructure (such as coastal/port infrastructure, marinas and fishing facilities etc), transportation networks and coastal-dependent businesses, in addition to loss of land and contamination of freshwater resources, all of which will inevitably impact the continuity of operations—and the bottom-line. Altered global weather patterns may also create prolonged drought periods or conversely unprecedented rainfall within the Caribbean, which may be particularly disruptive to the agricultural sector, potentially creating food supply disruptions and generally reducing food security within the region.

Risk Management
The undeniable negative operational and fiscal impacts to the Caribbean due to climate change underscores the need for robust business continuity planning in both the public and private sectors. While managed disaster management responses are aimed at providing support to the emergency relief efforts in the aftermath of a serious climate-related event, proactive business continuity related strategy development is now not just a mere suggestion, but a necessity within the region to ensure that businesses can continue to operate during and after a climate-related disaster. For example, Caribbean states should call for the harmonisation of sound national and regional building codes, co-created from collaboration with the private and public sector, as part of disaster risk reduction strategies. Identifying, assessing and managing the associated risks of climate change should now be embedded into organisational strategic planning to determine the best cost-beneficial strategies to mitigate against the identified climate-related risks.

Businesses must also consider the financial risks due to climate change, which may increase the cost of borrowing, reducing growth and undermining fiscal sustainability. Business financing options should include aspects of disaster risk reduction that are aligned to ensure infrastructural resilience.

Emergency Response Planning
Organisations should also consider the need to create, or enhance existing, emergency response plans that incorporate climate-related emergencies. Businesses in the Caribbean can no longer afford to consider “standardised” emergency planning. They must incorporate short- and long-term climate-related emergency planning with integrated communication protocols, roles and responsibilities as well as additional resource allocation. Climate-related emergency scenarios should also be incorporated into emergency drills and rehearsals, so that all stakeholders can be prepared to react and respond accordingly.

Business Impact Analysis
Business impact analyses allow for the comprehensive assessment of potential disruptions arising from climate-related impacts. Businesses can identify or clarify critical functions and business processes, along with more precise estimation of potential losses if the likely impacts are realised. This in turn would drive more appropriate climate change-related risk reduction strategies. An expansive business impact analysis will help organisations prioritise the allocation of adequate resources to mitigate against potential climate-related threats, ensuring the continuity of operations before and during an event, with the development of business strategies commensurate with the business impact analysis to buffer the impacts of the threats.

Are businesses aware of their recovery time objectives or minimum business continuity objectives? Can businesses resume at 50% or 75% capacity? These critical aspects of business continuity must be considered when analysing impacts to operations. Businesses must also consider the tremendous risk of climate-related disasters, which are the largest contributors to corporate insurance losses. The costs of natural disasters are expected to skyrocket with the increase in natural disasters globally – as seen in the shift in costs of annual losses over a 10-year period from US$74 billion to US$123 billion. Anticipating the impacts of climate-related disasters and focussing on implementing appropriate disaster risk reduction strategies should be a key corporate driver in strategic planning.

Use of Technology & Protection of Data
Businesses are becoming increasingly reliant on using technology and data in their operations. Therefore, they must secure technological assets and protect critical data in the event of a climate change-related impact. Resilience includes ensuring third-party systems and application providers can provide continuity of service or operations – the Cloudstrike programme disruption and global Windows system outage in July 2024 is a stark reminder of how reliant the global community is on technology and data.

Investing in redundancy systems to support IT and data protection should be considered by businesses when analysing climate-related impacts to operations. In the aftermath of Hurricane Beryl there were no forms of communication in or with Carriacou, as the mobile networks were disrupted. however, some entities, including first responders, were able to access direct satellite-hosted networks to maintain communication. Businesses heavily reliant on technology and internet hosted services should consider the immense value in investing in two-way satellite-based internet services (such as that provided by Starlink) as part of their communication redundancy systems to mitigate against any disruptions in a disaster.

Stakeholder Collaboration & Engagement
There is the added value of incorporating stakeholder collaboration as part of robust business continuity planning process as this relates to climate-related impacts, involving employees, customers, suppliers, and key local and regional governmental authorities, for the purpose of forging ironclad relationships that would be mutually beneficial in times of crisis. Enhanced positive relationships increase capacity and resilience when faced with impacts to operations, with the added benefit of coordinated response mechanisms being deployed in a timely manner when required. Increased collaboration can also provide additional valuable resources and support in building climate change-related resilience and disaster preparedness.

Building Resilience & Sustainability
Businesses within the Caribbean are at high risk for climate-related challenges and impacts to operations, and there is a surging need for these businesses to embrace a more proactive approach in developing and implementing sound principles of business continuity planning and management. The goal of resiliency in times of climate-related crises should be driven by the need to integrate sustainability across all aspects of business operations and strategies. By incorporating sound principles of sustainability in business models, the Caribbean business community can proactively monitor, anticipate and mitigate against the harmful effects of climate change. Businesses should consider leveraging available digital tools in the enhancement of operational resilience in business continuity planning and management and embrace the use of predictive analytics and artificial intelligence for horizon scanning and risk mitigation.

Diversification & Developing a Culture of Resilience
Climate change-related threats to the Caribbean have highlighted the urgent need for a transformational shift away from the traditional singular dependencies on industries such as tourism or petrochemicals, and to encourage the diversification of streams of income to buffer against any potential (and perhaps inevitable) climate change-related economic shock. Investing in increasing a culture of resilience can also be a critical strategy for Caribbean businesses and governments to consider, as this equips businesses, their employees and the wider population with the necessary skill sets and tools to promote continuity of operations on all levels.

Conclusion
In conclusion, the Caribbean is especially vulnerable to the impacts of climate change that are being experienced in real time year after year. Hurricane Beryl again has reminded the region of the level of overexposure to climate change-related impacts. With at least 55 fatalities recorded from the passage of Beryl through the Caribbean and to North America, this hurricane was an unembellished reminder of the current realities faced by many at risk communities. In Saint Vincent and the Grenadines 48% of the population was considered vulnerable and exposed, with 38% in Grenada and 20% in Jamaica, corresponding with US$2.29 billion in capital exposure in SVG, US$1 billion in Grenada and US$70.7 billion in Jamaica. While investment in early warning systems is encouraged and may reduce population fatalities, the economic impact of climate change-related impacts to the region cannot be overstated. There is a comprehensive need for bespoke risk mitigation strategies that embed long term resiliency and sustainability in the face of climate disasters, while leveraging the use of appropriate technology and fostering valuable collaboration and resource allocation.

Governments and corporate entities are encouraged to embed business continuity planning and management into internal ESG practices to strengthen long-term business resilience, improve preparedness and strengthen stakeholder confidence. No longer can the Caribbean community view business continuity planning and management as an option – it should be “par for the course” in considering all things climate change-related.

ABOUT THE AUTHOR

Marise K. Johncilla is the Principal Consultant at The Serenon Group Limited – OSH and Business Continuity Consultancy
and a Member of AMCHAM T&T's HSE Committee