An Agenda for Business Action: Dealing with Systemic Shocks

How should the private sector address the systemic shocks of the pandemic and natural disasters amidst economic crisis? Preparing for, responding to, and rebuilding after natural and humanitarian disasters and pandemics is a strategic issue for the private sector and a mechanism for enhancing risk management, innovation and resilience.

By their very nature, systemic shocks cannot be addressed by any one actor in isolation, rather they require collective action and coordination to build resilience.

Companies are developing strategies for disaster preparedness, response and recovery and for building resilience by working with civil society, governments and with other companies within their industry sector or locations of operation. They are taking action both before and after natural disasters and pandemics. To be effective, they are harnessing a combination of their core business capabilities and operations, value chains, community engagement, philanthropy and policy dialogue capabilities. After conducting a comprehensive review of private sector initiatives, our group of researchers at the Kennedy School at Harvard have developed the following Agenda for Business Action:

An Agenda for Business Leadership

(1) Use core business competencies to support recovery and resilience

The core competencies of the private sector have a significant role to play in supporting recovery and resilience after natural disasters and pandemics. Logistics expertise, technology platforms, manufacturing facilities, strategic planning, project management, engineering, construction, health care, data collection and mapping can all contribute to recovery and resilience efforts. Each industry sector and company have specific resources and capabilities that they can harness to engage in disaster response, recovery and resilience efforts.

(2) Promote resilience throughout the corporate value chain

Suppliers and contractors can be vulnerable to the impact of natural disasters and pandemics. Companies can either require or support their suppliers to be better prepared by sharing expertise on planning and preparedness processes. They can add preparedness measures to the company’s supplier code of conduct, including requirements for health and safety and crisis management planning. Examples include requiring suppliers to conduct regular safety drills, including but beyond occupational safety. Companies can also encourage suppliers and contractors to assist their local communities in recovery and resilience efforts. 

(3) Develop long-term alliances with key stakeholders

Responding to natural disasters and pandemics and strengthening resilience are long-term efforts that require coordination between a wide range of internal and external actors. Companies should create teams to respond to natural disasters and create scenarios for effective employee action. In addition, companies can establish long-term partnerships with NGOs before natural disasters and pandemics occur to ensure the policies and programs are in place before urgent action is needed. It is essential that business leaders understand the needs and capacity of NGO partners and discuss strategy in advance. The private sector can play a key role in building the capacity of local community organizations.  

(4) Work at the industry sector level to leverage impact 

Creating sector-wide efforts to promote resilience allows for concerted action and joint implementation.  The creation of sector “platforms” allows for more strategic and comprehensive intervention. The platforms need to be in place and functioning before a natural disaster occurs. Companies need to assign roles and responsibilities and plan for different types of natural disasters and pandemics, in addition to conducting training to ensure preparedness.    

(5) Promote local job creation and entrepreneurship

Education and training programs can help to jumpstart local economic development and job creation, especially in the aftermath of natural disasters and in the midst of pandemics. Working in partnership with local organizations, companies can deliver training in a wide range of areas, from social entrepreneurship and green energy to agriculture and telecommunications. By creating local jobs, companies, partnerships and platforms can help to service the needs of business, of maintaining technology and “building back better.”  

(6) Promote social innovation and social entrepreneurs

To promote economic development and community resilience after a natural disaster and in the midst of pandemics, companies can serve as catalysts for social innovation, either as investors in new social business ventures or by creating new markets and business opportunities for social enterprises. Rather than looking for external solutions, companies should invest in nurturing local entrepreneurs and start-ups to create business opportunities and foster employment.

(7) Promote green (re)construction and nature-based solutions

Part of the “build back better” concept is to integrate sustainable design elements into buildings and programs. For example, after a natural disaster, companies can help to promote the use of renewable energy and sustainable design, while decreasing the reliance on water and raw materials. Companies can play a vital role in helping governments and communities to “build back green.”

(8) Consider rebuilding and resilience efforts in the context of the Sustainable Development Goals  

The Sustainable Development Goals (SDGs) provide a framework for designing and evaluating partnerships and programs to promote resilience and rebuilding. Focusing on decent work and promoting industry, innovation and infrastructure in the aftermath of natural and humanitarian disasters can add dynamism to on-going efforts at the local, national, regional and global levels.

(9) Promote equity in recovery efforts

Women, children, indigenous peoples, people of color and the elderly may suffer disproportionately when disasters and pandemics strike. Recovery efforts need to take into account the way in which these groups will be impacted by recovery efforts. The most effective partnerships are inclusive and build in the participation of youth, women and other groups who have been excluded from development efforts in the past.  

(10) Strengthen Integrity and Good Governance

Good governance provides an essential framework for private sector and NGO partnerships. National and regional governments have a key role to play in providing an environment that enables preparedness, emergency response and resilience building. Customs officials and other legal structures should not impede the delivery of medicines and other operations for disaster relief and prevention. Corruption impedes development and resilience. All institution building efforts should promote good governance.              

This blog entry is based on a forthcoming White Paper co-authored with Jane Nelson and Ariel Silverman at the Kennedy School at Harvard University, with funding from the High Meadows Institute and initial funding from the Clinton Global Initiative.