<p><strong>Speaker 0</strong>: <span>to discuss climate resilience. I'm joined now by James Harvey. He is a specialist on this topic and a risk engineer. Part of Zurich resilience solutions. Uh, James Climate resilience. What is</span></p> <p><strong>Speaker 1</strong>: <span>it? Yeah, it's it's There's many things that go into climate resilience, but there are There are two key factors that we want to focus on here. Uh, the first one is mitigation. And the second one is adaptation.</span></p> <p><strong>Speaker 1</strong>: <span>So mitigation is about reducing our impact on the environment and adaptation is about reducing the impact on the environment on us society. Our operations. Really? Um, so a really good example of mitigation, um, would be an organisation that are transitioning to a low carbon economy. Maybe they are changing their vehicle fleet from petrol and diesel over to electric or hybrid vehicles. So, in doing so, trying to reduce their carbon,</span></p> <p><strong>Speaker 1</strong>: <span>um, and therefore mitigating their impact, uh, on on the environment.</span></p> <p><strong>Speaker 1</strong>: <span>So the other end of that would be adaptation. So reducing, um, the impact the environment has on on operation and society. Uh, and a really good example of that is the reason we were working with a customer that is situated on the banks of the main river that really high flood risk? Um, we undertook flood risk assessments to determine where their risk was predominantly focused. So it's to do with the river, actually, um, not surface water or ground water or any any other source of flooding. It was predominantly focused with the river.</span></p> <p><strong>Speaker 1</strong>: <span>Um, and with that, that educational facility, um, was determined to be a risk of approximately one metre flood depths. Um, which meant that designing in resilience measures was going to be quite difficult here. We couldn't really keep the water out. So actually, in terms of adaptation, the conversation was about OK, what can we do to allow this water in, but to recover quickly? Um, so we've worked with that customer to create a response plan that is tailored off an early warning system so they know when</span></p> <p><strong>Speaker 1</strong>: <span>to act, and they have actions to do before, during and after an event. And that plan details who does them and when when they do them. Uh, and the ultimate part point of that plan is to reduce the business interruption and the property damage that would otherwise be felt. If a flood were to occur and so it really allows them to become more resilient to that particular hazard.</span></p> <p><strong>Speaker 1</strong>: <span>Um so to summarise, climate resilience is about for a business looking at how they can mitigate but also adapt to climate change as one, not just one or the other, but doing both, uh, and looking to exploit the opportunities that come off as a result of that as well.</span></p> <p><strong>Speaker 0</strong>: <span>So in the round, how well are we prepared in the UK for the changing</span></p> <p><strong>Speaker 1</strong>: <span>climate? So that's quite a tricky one to answer. Um, it's difficult to quantify preparedness, but the general consensus is that we're pretty underprepared for for climate change. Um, and we can definitely see that if we look around the world, we've seen wildfires in Canada, you know, heat waves in Europe, you know. And whilst we might understand these these hazards in terms of how they how they operate, how they,</span></p> <p><strong>Speaker 1</strong>: <span>um, what the impacts of these hazards are, For example, um, we're not familiar with the extremes of these, and we're likely to see an increase in this frequency and the magnitude of these extreme events. And it's that that we are not really prepared for,</span></p> <p><strong>Speaker 1</strong>: <span>um so that that's really one of the biggest challenges is is trying to understand how this is going to impact us. There's a lot of uncertainty within these models as to what the impacts are going to be. Um, so how do we prepare for it when we're a little bit uncertain? And to date, a lot of the work has mainly been on that mitigation arm that we just talked about. So organisations trying to reduce the impact that they're having on the environment and reducing their carbon</span></p> <p><strong>Speaker 1</strong>: <span>not so much on adapting to the impact the environment has on themselves Um so we're a little bit behind in terms of adaptation but you know all is not lost. Organisations are starting to adapt as regulation that's coming into place. That's requiring organisations to do so. And there are companies that exist that are able to help organisations begin to adapt to climate change and become more climate resilient.</span></p> <p><strong>Speaker 0</strong>: <span>Well, picking up on that point you mentioned regulation is regulation fundamentally the key driver of change in this space?</span></p> <p><strong>Speaker 1</strong>: <span>Yeah, I mean, it's it's one of the key drivers. Um I would say that there are four key drivers. The first one is physical risk. The second one, I would probably say, is regulatory risk. Um then we have stakeholder expectation and also insurability.</span></p> <p><strong>Speaker 1</strong>: <span>So if we if we go through those, the the physical risk is for those organisations that are being impacted by those particular climate hazards. So if you're being impacted by flooding or lightning or hail or um, you know, heat,</span></p> <p><strong>Speaker 1</strong>: <span>then you're you're starting to experience business interruption and business uh, property damage as a result of those those hazards. So really adapting to climate change reduces the impact of that. So that's the first driver is the fiscal risk. The second driver is regulation. We're starting to see an increase in the amount of regulation that's coming in for predominantly at the moment. Larger companies and organisations that have to be disclosing what they're doing in terms of climate resilience and be showing that they are adapting to climate change.</span></p> <p><strong>Speaker 1</strong>: <span>The stakeholder expectation piece is a bit a bit more a bit newer, Um and that's more around what the customers, what the employees and what the investors are looking for in those those organisations in terms of their ESG, so their environmental, social and governance sort of commitments. Um, and that has a direct impact on their reputation and valuation as a result of that, um, and then the final one would be the insurability piece. So</span></p> <p><strong>Speaker 1</strong>: <span>organisations that are proactive in managing their physical risks that are that are impacting them from a property damage and business interruption perspective are likely to increase their inability by being proactive in that space. So by adapting to climate change, um, and, uh, undertaking climate resilience, you're able to tick off physical risks or reducing your physical risk, the regulatory requirement, um, achieving or exceeding stakeholder expectations.</span></p> <p><strong>Speaker 1</strong>: <span>And also, um, ensuring that you keep that insurability.</span></p> <p><strong>Speaker 0</strong>: <span>We've touched on flooding a little earlier. But what are some of the other major hazards that we faced here in the UK? And how can we improve our resilience to them? Yeah,</span></p> <p><strong>Speaker 1</strong>: <span>it's a there are. There are a number of climate related hazards. Um, but in the UK, there are sort of three main, uh, climate hazards. The government recently released the National Risk Register 2023 and that summarises sort of the 63 most serious risks posed to the UK.</span></p> <p><strong>Speaker 1</strong>: <span>Of those, the five of the top 20 were shown to be climate related hazards. Um, and we can summarise those in terms of flooding that we've discussed, but also extreme heat and extreme cold as well.</span></p> <p><strong>Speaker 1</strong>: <span>So we're starting to see this increase in these these hazards. Um, and those are really the main ones that we we are seeing for the UK at the moment. So in order for an organisation to become more resilient to those you have specific, um, measures or or procedures that you can enact depending on the hazard and depending on the organisation and and the processes or operation of that business. Um, but one of the main things you can drill it down to is sort of four key steps. The first one would be to identify what the hazard is.</span></p> <p><strong>Speaker 1</strong>: <span>Second one would be to prioritise which, um, assets are being impacted. And what measures you could look to implement are those what's the most cost effective and efficient measure for reducing the risk? Uh, and then actually acting and implementing that measure, Um and then you would. The final step would be to communicate on that. So to disclose that for regulation, but also to have that as a thing to continually monitor because you want to continue to monitor the effectiveness of that. That measure that you've deployed,</span></p> <p><strong>Speaker 1</strong>: <span>Um, so recently we've been working with a few customers and we were approached by a local housing association, um, that have seen a marked increase in the exposure of their assets to flooding.</span></p> <p><strong>Speaker 1</strong>: <span>And they want to look at where their risk is and what they can do to try and reduce that. So we will work with them to identify the highest risk assets and given them some, um, recommendations to improve their resilience to flooding. And now they are now in the process of implementing those Those measures to in the long term, improve their resilience and reduce their sort of business interruption and property damage so that they can function when these inevitable climate hazards become more common with as little disruption as possible</span></p> <p><strong>Speaker 0</strong>: <span>out of interest. How much of this is science and how much of it is art when someone says, How susceptible are we to flooding? I mean, how confident can you be that you've thought of all the angles you've got all of the data points that are necessary.</span></p> <p><strong>Speaker 1</strong>: <span>Climate is dynamic. It's continuously changing. And like I said, there's uncertainty in some of the models at the moment, you know, and there's lots of potential outcomes that could happen for each of these hazards. But the the main thing is you can look at the trend and you can say that this is going to happen.</span></p> <p><strong>Speaker 1</strong>: <span>So are we prepared at the moment? And the answer to that, typically for some sites, is no. So it's taking that climate science and that data approach from from the modelling and actually applying that to site specific locations. How would this, uh, proposed impact? What would that actually mean at a site level? So that's when we start to implement those on site, um, expertise, industry expertise. What does this hazard mean for this location?</span></p> <p><strong>Speaker 0</strong>: <span>I want to come back to something you was chatting about a little bit earlier, around how well prepared the UK is for resilience. As you look at it in the round today, is there any part of the UK that you'd say is uninsurable on climate risk at the moment? Or do you go more down the line and saying as long as we do the right things, we'll all you know, as an industry, we'll always be able to provide insurance.</span></p> <p><strong>Speaker 1</strong>: <span>There are areas that are more exposed than others, for sure. Um, I wouldn't say we're talking about un insurability at the moment. Um, we need to be at the forefront of this. We need to be acting. We are. We are aware that we're at risk, um, from certain climate hazards, particularly in the UK. We're talking about flooding and extreme heat. So we need to understand how those climate hazards impact our organisations or operations and businesses and what we can be doing now to proactively manage that risk to prevent us from becoming uninsurable as it were.</span></p> <p><strong>Speaker 0</strong>: <span>You've mentioned a couple of different examples of clients that you've helped out, particularly around flood. But can you go into a little bit more of the detail of some of the things that you worked with</span></p> <p><strong>Speaker 1</strong>: <span>them on? Yeah, certainly. So when it comes to flood risk, I'd say there's sort of six key areas that I think people should be looking into. Um, the first one is the risk awareness piece. So do you know what risk you're exposed to at the moment</span></p> <p><strong>Speaker 1</strong>: <span>hazards and And what are the likely flood depths and and, um, velocities. And how long have you got to to react or to deploy a measure, for example? So flood risk is or risk awareness is the key, um, ground foundation that we need to have in this space. Um, the second one is to look at what already exists at a site. So typically there are existing drainage systems. Yes, they may need to be upscaled or or um,</span></p> <p><strong>Speaker 1</strong>: <span>improve to account for climate change. Um, but one of the main things you can do is look to actually just maintain those, um, something that we see a lot of is those existing drainage systems not suitably maintained. And therefore, when it does rain or we do have flood conditions, they're not able to cope. Um, so the second one is certainly that, um, maintenance piece. Once we pass those two factors, I'd be looking at resilient design.</span></p> <p><strong>Speaker 1</strong>: <span>So that's easy to say when you're looking at building in a new space, whether it's Greenfield or brown field, you know, you could design in those resilient measures, like having a hard floor or raising your electrics, for example. So we accept water is going to get into this building. But when it does, it's gonna cause as little damage as possible. That's the design phase, but we're not always in a fortunate position to be able to do that. So we need to be able to retrofit. So it's OK. Can I change the flooring? Can I raise those electrics anyway? Um, you know, do I need to reconfigure</span></p> <p><strong>Speaker 1</strong>: <span>or a certain use? So I'm currently using the ground floor for, uh, retail units. But actually it floods so often that it's just not suitable to use to use that space at all. So let's make it an uninhabitable space or not use. Utilise it. So we're putting people at risk, at least so that's the the design element.</span></p> <p><strong>Speaker 1</strong>: <span>And then there's the sort of early warning and and response planning which I've alluded to earlier with that previous customer, um, where it's having a warning system to tell me when I'm going to flood and how long I've got and what the potential depths were gonna be and have a plan in place to tell me with who's going to do it when they're going to do it and what they're going to do before, during and after an event. So that's the whole response planning piece. And then the final piece is OK, I know I'm going to have water on my site, and I really want to keep it out. How can I keep this out? So then you might be looking at more hard engineering, um, solutions</span></p> <p><strong>Speaker 1</strong>: <span>or maybe even some protective measures for the properties, such as, like a door barrier or a flood door. Or maybe a sump pump, um, portable pumps or non return valve, basically trying to stop water from getting into that building and limit the ingress. So that's much more of a A hard approach, I would say so those I'd say the six approaches you can look to take to really, uh, improve your resilience in terms of flooding.</span></p> <p><strong>Speaker 0</strong>: <span>James. A final question. If you're a broker that wants to get this kind of conversation going with their client, particularly, the client</span></p> <p><strong>Speaker 0</strong>: <span>doesn't feel that they've really suffered from the results of sort of any change to the climate at the moment. How What are your top tips on how they can get that going? Yeah,</span></p> <p><strong>Speaker 1</strong>: <span>absolutely. I mean, like, it's a really tricky conversation. Climate change is really dynamic, and it affects organisations and companies in very different ways. Um, so the first thing is really to understand if they've been impacted by climate change, and that's a really easy way to get in the door. But if they haven't, it can be a lot more complicated,</span></p> <p><strong>Speaker 1</strong>: <span>and it might be more of a regulatory route. They're looking to go down in terms of disclosing what they're doing for climate change. Um, but because it's such a complicated subject and it's so dynamic and and how it impacts those businesses, I'd say the best thing to do is to reach out to us. And we can really support you work with you to really understand what your customer needs and make sure that they get the right solution and the right sort of help to achieve what it is that they want to achieve. We</span></p> <p><strong>Speaker 0</strong>: <span>have to leave it there. James Harvey. Thank you.</span></p> <p><strong>Speaker 1</strong>: <span>Thank you.</span></p>