Insurance

Building Site & Climate Resiliency

Building Site & Climate Resiliency

When determining where to site a new building project, business executives usually base their decision on a short list of key criteria: the vibrancy of the local economy and hiring base; the adequacy of transportation and water resources; the strength of schools; and the diversity of housing.  “Resiliency” attributes – think community response to an extreme weather event – are usually overlooked (unless you’re locating offices in hurricane-prone Florida).

Ignoring such conditions today in site selection can prove shortsighted.  A recent conversation with Steve Adams, managing director of The Resource Innovation Group’s Climate Leadership Initiative suddenly brought this issue to the forefront for me.  Our conversation reminded me that developers and national corporate real-estate agents undoubtedly rank among the earliest climate-adaptation leaders in the corporate space.

These climate-adaption leaders should be looked to for counsel when siting a location.  They can identify possible crises that could occur with a site.  For instance, what happens if your cloud-computing operations are swept away from a flood or hurricane, especially abroad in developing countries ill-prepared for such an event?  As a result of that possibility, some companies are locating their cloud-computing operations off-shore.

Steve noted that some communities, such as a few along Florida’s Gulf of Mexico, successfully woo developers and corporations by marketing their response capacity, the depth of continuity planning and their track record at protecting economic loss from extreme weather.

I wager that business leaders’ short list of siting criteria soon will include a question or two that relate to preparation for, and response capacity to, extreme weather disruption. This might trigger broader demand for developers’ (and local governments’) adaptation thinking and action.  And if it doesn’t, insurability might. Increasingly, siting a structure in a questionable location can make it uninsurable or require it to pay higher premiums with a higher deductible.