“Generational Memory Threshold” May Influence Site Selection

As noted in our news section, extreme wet or dry conditions can affect buildings, machinery, data centers, transportation networks, supply chains, people and sales.

When companies have a choice, the experts advise, they should site their facilities in nothing less than 500-year flood zones (where there's only a 1-in-500 chance of a flood every year).

Companies should sharpen their focus on water management, i.e., diverting water from property, optimizing drainage and protecting water supplies, and consider new weather extremes when managing supply chains.

The white paper warns businesses of psychological obstacles to preparation. One is “generational memory threshold,” where a community's collective memory is too short to remember major disasters such as an earlier 1-in-500-year hurricane.

Another obstacle is heedlessness. In earlier FM Global research, 96 percent of financial executives surveyed said their companies had operations that were exposed to natural catastrophes like hurricanes, flood and earthquakes; yet fewer than 20 percent said their organizations were “very concerned” about such disasters hurting the bottom line.

“As an engineering-driven property insurer, we collaborated with leading experts in atmospheric science to understand in great detail the effect of climate change on precipitation,” said Louis A. Gritzo, Ph.D., vice president, manager of research at FM Global. “We very much hope that business leaders will use this white paper to continually enhance their resilience by preparing their property for whatever precipitation extremes they are likely to experience.”

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