Introducing the Key to 21st Century Business Success: De-Risk

While I am aware it is a controversial subject, we do know that the consensus of the overwhelming number of scientists around the world is that climate change is real and is changing most likely due to human actions. Accepting this helps us understand why Hurricanes Harvey, Irma, and Maria, were so unusually destructive. And worse, why more such hurricanes can be expected in the future.

These storms were front page news and received days of news coverage. But some examples of the problems caused by climate change get considerably less attention. For instance, since 1953 the state of Arkansas has experienced 59 presidentially declared disasters. However, 17 of those presidentially declared disasters have occurred in just the past eight years.

While it received only moderate attention, the American Farm Bureau Federation came to the conclusion in 2015 that they “recognize there may be an increase in occurrences of extreme weather” in coming years. This may produce droughts as well as flooding and that both scenarios can have a significant impact on the U.S. agriculture industry and food production in this country.

Also getting less news coverage than it deserved, the Insurance Information Institute reported that “there is now a consensus among the scientific community that the climate is changing, with potential risk to the global economy, ecology, and human health and well-being.” Because of this, Lloyd’s of London is now urging its insurers to protect themselves against climate change because it now has the potential to negatively impact businesses around the world and international business operations.

These examples and these organizations believe the risks of climate change is real. The jansan industry will not be immune to these changes. Climate change has the potential of causing havoc in our industry. The only way we can address this is by protecting our selves and the way we do this is to “de-risk.”

Definitions and Strategies

De-risk, according to the Cambridge Dictionary, means to make something safer by reducing the possibility that something bad will happen and that money will be lost.

We already see how some in the jansan industry are taking steps to de-risk.

In an earlier column, I reported that as a result of ISSA’s Distributor Efficiency Analytics & Learning (DEAL) program, each participating distributor saved on average $20,000 in operating costs as a result of green and sustainability initiatives implemented in 2016. Further, these distributors are on their way to save even more in 2017.

So, they are not only reducing operating costs, but the very same steps that produced these savings are also helping these distributors de-risk. Climate volatility will not have the same punch for them because they have already taken measures to reduce fuel and energy needs. This helps them adjust to cost increases as well as disruptions.

The same is true when it comes to water, waste and other metrics. This gives them more of a chance to keep their business doors open after a storm than their competitors down the street that have not incorporated de-risk strategies.

Outside our industry, another example is how California has been able to reduce the risks caused by long-term droughts. In the late 1970s, the state was literally on its knees due to a one year drought. However, recently, California endured a five-year drought, which had little impact on the state’s businesses and citizens until its final year.

And even then, citizens were asked to cut back consumption by just 25 percent, compared to about 50 percent 40 years ago. We should also point out that the state has nearly double the population today as it had in the 1970s and its industrial growth has been nothing less than dramatic.

How did they do this? They looked into new and alternative strategies to help them de-risk. They developed more water storage facilities, created water re-use programs, and “spread the pain,” so that arid areas of the state could receive water from areas not as impacted by drought conditions.

All businesses in our industry are going to need to find ways to reduce their risk of climate change. Technologies such as ISSA’s DEAL program are available to help make the process easier and smoother. The good that will come is that we are better prepared for climate volatility and, in the meantime, can save quite a bit of money along the way.

Stephen Ashkin is president of Sustainability Dashboard Tools, Inc., and known in the professional cleaning industry as the leader in turning sustainability into cost savings. He can be reached through his website at http://ashkingroup.com