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date: 30 September 2022

Disasters and the Private Sector: Impact of Extreme Events, Preparedness, and Contribution to Disaster Risk Reductionfree

Disasters and the Private Sector: Impact of Extreme Events, Preparedness, and Contribution to Disaster Risk Reductionfree

  • Simon A. Andrew, Simon A. AndrewUniversity of North Texas
  • Vaswati ChatterjeeVaswati ChatterjeeVillanova University
  •  and Gary WebbGary WebbUniversity of North Texas

Summary

Private-sector organizations play a significant role in disaster management. Small businesses and larger corporations employ a sizable population in our communities, provide essential goods and services, and are often an integral component of community development. Within the disaster management arena, private-sector organizations in coordination with government agencies provide valuable services in the aftermath of disasters. They make valuable contributions to relief and response through donations and volunteering. They also aid the recovery process through continued employment that provides economic stability to the surrounding community and provision of essential services like food, rebuilding and reconstruction services, and housing for displaced populations. Certain businesses may also significantly contribute to long-term disaster management functions like community disaster risk reduction. While small businesses often actively participate in community resilience planning and implementation, larger corporations also contribute toward sustainable development through corporate social responsibility policies.

However, to be effective partners in disaster management, businesses need to be first prepared to maintain continuity of operations in the aftermath of disasters. Having a continuity of operations plan and taking financial preparedness measures have been found to be effective for survival of businesses. Businesses may face other challenges when participating in disaster management actions—specifically, lack of resources and knowledge, as well as collective action risks associated with public–private partnerships. Additionally, not all private-sector agencies may be motivated to contribute toward disaster risk reduction practices. In fact, disasters can often create short-term positive economic impacts due to flow of external aid and increased demand for certain services like construction and housing—thus motivating businesses to choose short-term economic profits over long-term investments in disaster risk reduction. In summary, while the role of the private sector in disaster management is crucial, their involvement is complex and faces numerous challenges. The connection between businesses and community resilience is also less studied. It is therefore of value to examine the role of businesses as significant stakeholders in community disaster management, identify factors that motivate or hinder their participation, and discuss ways in which businesses can improve their own preparedness so as to minimize disruption in the aftermath of disasters.

Subjects

  • Mitigation
  • Risk Management
  • Policy and Governance
  • Preparedness

Introduction

The private sector is an integral component of communities. Private-sector businesses are significant stakeholders in the economy, generate employment and livelihood, provide goods and services, and often assist in development of communities (Hunt & Eburn, 2018; McKnight & Linnenluecke, 2016). The significant role of the private sector is furthermore realized in the aftermath of disasters. With the rising frequency of weather-related disasters, the impact of such events is significant among private sector businesses—in fact, the Federal Emergency Management Agency (FEMA) reports that 40% to 60% of small businesses close permanently after disasters (SDSU, 2021). Disruption of businesses results in loss of employment and disruption in supply of essential goods and services, and it is overall detrimental to economic well-being of the larger community. For example, the United States experienced “20 weather/climate disaster events with losses exceeding $1 billion each” (NOAA, n.d.).

The term “private-sector” includes a wide range of actors that vary in size (small business owners to multinational corporations), ownership and company structures, and types of businesses and industries (Investopedia, 2020; Izumi & Shaw, 2014). Overall, the private sector includes for-profit private-sector and private foundations. In the United States, ownership of the for-profit private sector can be categorized into sole proprietorships (mostly small businesses and employing fewer than 500 employees), partnerships (which have multiple owners who divide the business profits among themselves), and limited liability companies (LLCs) or corporations (Investopedia, 2020; SBA Office of Advocacy, 2016). Henceforth, the use of the term “private-sector businesses” or “businesses” reflects for-profit business organizations that can be sole proprietorships, private partnerships, small businesses, or LLCs and corporations.

The International City/County Management Association (ICMA, 2009) emphasizes that improving community preparedness to save lives and property during extreme events is the core responsibility of not only local governments but also the private sector—making the latter important partners in disaster management. Similarly, scholars have also advocated for intersectoral partnerships like the “whole community approach” to disaster management (Kapucu, 2015; SDRP, 2018; Stewart et al., 2009), which includes the private sector as essential stakeholders in disaster management.

The discussion of the role of the private sector in disaster management can be guided by three major research questions. First, what is the scope of impact and survival of private-sector businesses after disasters? Impact of disasters on businesses can vary based on specific business characteristics like sector of operation, ownership, and physical condition of built spaces (Brown et al., 2015; Marshall et al., 2015; Webb et al., 2002). Disasters can also have macroeconomic impacts on production level, labor, technology, and global supply chains (Leiter et al., 2009; Ye & Abe, 2012). The second section discusses the scope of impact of disasters on the private sector—specifically, through two avenues: impact of disasters on macroeconomic conditions and impact of disasters on individual businesses. Alternatively, disasters can also create short-term positive economic impacts because of flow of government aid and increase in demand in certain sectors like construction and housing industry (Kousky, 2014; Vigdor, 2008; Von Peter et al., 2012)—the “Postdisaster Positive Economic Impacts” section consequently examines the short-term positive economic impact of disasters.

Second, how can private-sector businesses prepare for disasters? Survival of businesses in the aftermath of disasters is crucial both for maintenance of production levels and to be effective partners in community disaster management. For survival, developing preparedness capabilities and business continuity plans is needed (Cerullo & Cerullo, 2004; D’Souza & Dahlhamer, 1997; Hatton et al., 2016; Ready.gov, n.d.; Zsidisin et al., 2005). For example, according to FEMA, 80% of businesses that failed within 2 years of Hurricane Andrew lacked a business continuity plan (Cerullo & Cerullo, 2004). However, businesses may not have adequate resources, technical know-how, or motivation required to adopt preparedness measures (Han & Nigg, 2011; Landahl, 2013; Landahl & Neaves, 2016). The third section discusses disaster preparedness among private-sector businesses through business continuity plans and financial preparedness measures.

Finally, what is the role of private-sector businesses in community disaster risk reduction practices? The private sector can be instrumental in disaster risk reduction (DRR) by extending emergency management functions among their employees and client base, and through partnerships with other relevant organizations and the local community. However, they may also face bureaucratic, collective action risks, and resource-related challenges that can limit their participation (Adekola & Clelland, 2020; Marker et al., 2014). Additionally, certain businesses may profit from disasters (e.g., increase in construction-related activities during postdisaster rebuilding) and choose not to engage in long-term DRR within communities because of short-term economic gains (Klein, 2007), or limit their participation to philanthropic contributions that are motivated by reputational gains (Muller & Kraussl, 2011). The fourth section therefore examines the role of the private sector in disaster management practices through two major avenues—response and recovery, as well as contribution to disaster risk reduction. Consequently, factors that can challenge the role of the private sector in disaster management activities are also examined.

Scope of Impact and Survival of Private-Sector Businesses After Disasters

The scope of impact of disasters on private-sector businesses can be discussed in two categories—first, impact of disasters on macroeconomic conditions and, second, direct impacts on individual private-sector businesses.

Impact of Disasters on MacroEconomic Conditions

Existing studies have indicated that disasters can destroy the capital stock of an economy and have negative impact on production (Leiter et al., 2009); disrupt global supply chains (Ye & Abe, 2012); have a long-term negative impact on population size, income level, and gross domestic product (GDP) per capita (Fairbairn, 1998; IDB, 2021); and increase national debt (Koetsier, 2017). Additionally, large natural disasters are also found to impact bilateral trade flows (see Felbermayr & Groschil, 2013). While international borrowing and asset sales can balance temporary shocks after disasters, the impact of disasters on import and export can vary based on overall GDP and existing geographical or financial constraints in a country (Felbermayr & Groschil, 2013, p. 20).

At the community level, natural disasters can affect credit rating of a jurisdiction, which in turn increases interest rates on borrowing and thus reduces investment and potential growth in business activities. Jerch et al. (2020, p. 22) argue that hurricanes can lower public financial resources and public goods expenditures, increase default risk, and reduce debt utilization. These events can impose direct and indirect costs on jurisdictions (indirect costs being outmigration of population, reduced property values, and lower economic activities) that can have long-term economic impacts through delayed capital investments and depleted debt reserves. Consequently, credit rating agencies can take these impacts into account, leading to a decline in municipal credit ratings. In fact, Moody’s Investors Service considers increasing threat of climate change and the level of community resilience to effects of climate change as important factors in credit analysis (Smart Surfaces Coalition Report, n.d., p. 3).

In summary, larger macroeconomic impacts of disasters can trickle down to performance of individual businesses. Disasters can impact private-sector businesses not only through direct physical impacts but also through immediate- and long-term impacts on labor, productivity, and public and private capital investment. Specifically, the loss in asset and human capital as well as a decline in population can affect the long-term recovery process of businesses. For example, a study conducted by Dietch and Corey (2011, p. 321) on 186 businesses in the New Orleans area 4 years after Hurricane Katrina found that decline in national economy, slow recovery of surrounding neighborhoods, and overall shortage in labor and the customer base significantly impacted businesses failure or success. That is, businesses performed worse in revenue generation (when compared to pre-Katrina levels) when these various negative macroeconomic factors were present.

Dietch and Corey (2011, p. 321) also argue that difficulty of recovery among businesses in New Orleans was also attributed to their expectation of the federal government to do more in providing aid to victims. In other words, business’s ability to recover after a major disaster is tied to regional economic growth, which “depends further on the severity of the disaster, and the speed with which money can be mobilized and reconstruction can be implemented” (Loayza et al., 2012, p. 1319).

Impact of Disasters on Private-Sector Businesses

When examining the direct impact of disasters on individual private-sector businesses, utility interruptions are a major contributing factor (Schrank et al., 2013; Tierney, 1997). The literature, for the most part, suggests that the ability of private businesses to function after major disasters depends on the extent to which (a) physical damages are affecting economic activities, that is, structural aspects of buildings (deemed unsafe and waiting to be assessed by authority for repair), vehicles, and equipment; (b) damages in utility lifeline (i.e., electricity, water, sewer, and communication); (c) damages to transportation infrastructure (i.e., roads, rail, port facilities), which disrupt the flow of goods and services, supply chain and shipments/freight, inventory and production capacities, access to customers and employees’ (personnel) ability to go to work—commuting; and (d) disruption to customer base and vendor contractual arrangements (i.e., foot traffic, customer spending) (Brown et al., 2015; Dietch & Corey, 2011; Ghandour & Benwell, 2012; Tierney, 1997; Webb et al., 2002; Zhang et al., 2009).

The scope of impact of disasters on businesses is varied. Schrank et al. (2013) estimated that about 18.9% of small businesses closed after Hurricane Katrina.1 Tierney’s (1997) study of flood in the Midwest found that 42% of firms affected by the flood had to close due to lack of water and sewer services, electricity, and phone. This figure is significant when considering only 15% of businesses in Des Moines were affected by the flood. In fact, businesses that are not physically damaged by a disaster may still be affected by utility disruption (i.e., through failure of supplier to transport supplies, causing a “domino effect”) (Zhang et al., 2009). A computer simulation of loss of electricity in the Memphis metropolitan area by Rose et al. (1997) found that, a restoration of power within 2 weeks, would cost the region 7% of the gross regional product.

Impact of disasters on private-sector businesses can be sector specific. Brown et al. (2015) examined 541 firms affected by the Canterbury earthquake in 2011. They found that sectors related to (a) public administration and safety; (b) rental, hiring, and real estate services; and (c) information media and telecommunication were affected the most by the earthquake. Further, the higher the impact of a disaster, the lower the reported recovery among the surveyed firms.

Marshall et al. (2015) found that three major factors contributed to closure of small businesses after Hurricane Katrina—“contextual conditions (coastal location, retail industry sector, sole proprietor ownership), behavioral/strategic characteristics (smaller number of employees, less industry experience, less disaster experience, less experience with prior short-term disaster closure, and prior cash flow issues), and cognitive characteristics (perceived success before disasters)” (p. 349). The authors found that while businesses that were partnerships were more likely to reopen after Katrina (possibly due to additional management experience of partners involved), older businesses, those with prior-closure experience, and businesses with prior cash flow issues were more likely to close (pp. 348–349).

Severity of impact on the physical structure of businesses is also a significant factor in determining survival of businesses after disasters. A study conducted by Webb et al. (2002)—among businesses in Santa Cruz after the Loma Prieta earthquake—found that firms experiencing greater disruptive structural damages tend to recover less in the long run. This finding was consistent with the research that was conducted by Tierney (1997) after the Northridge earthquake in Los Angeles—wherein businesses returning to the affected area were found to have faced multiple factors like damages to their premises, as well as loss of inventory and stock—that led to business closures in the long run (Dietch & Corey, 2011).

Finally, disasters can disproportionately impact private-sector businesses owned by women, veterans, and people of color (historically underrepresented groups in general). Minority-owned businesses are found to have limited access to capital, skill development, and formal business networks (Fairlie et al., 2021; Helgeson et al., 2022). These structural challenges can make minority-owned small businesses especially vulnerable to natural hazards. For example, Marshall et al. (2015) found that historically underrepresented owners had increased likelihood of business closure after Hurricane Katrina. Similarly, Helgeson et al. (2022) found that small businesses owned by underrepresented groups were disproportionately impacted by the overlapping complex events of the COVID-19 pandemic and natural hazards.

Postdisaster Positive Economic Impacts

While the adverse impact of disasters on private-sector businesses is well documented, certain private-sector organizations can also profit from disasters. Klein (2007) lays out the concept of “disaster capitalism” wherein disasters are treated as “exciting marketing opportunities” (see Fletcher, 2012, p. 99). For example, reconstruction after disasters can be treated as a positive opportunity for investors (Klein, 2007). Similarly, while the Department of Homeland Security awarded $3.6 billion in over 36 different contracts for trailers used to house displaced population after Hurricanes Katrina and Rita (Adams et al., 2009), Blackwater Security, a company known for its failures during the Iraq War, was awarded a federal contract to deploy armed guards in New Orleans after Hurricane Katrina. Disaster capitalism authors have in fact argued that with profitable ventures ensuring after disasters for large corporations, the climate crisis is often treated as a marketing opportunity instead of proactive engagement in mitigation and adaptation activities by specific organizations.

The argument set forth by disaster capitalism has been substantiated by various other studies. For example, Leiter et al. (2009), comparing firms in regions affected by floods, found that, in the short run, firms in the affected regions, on average, tend to have a higher growth in asset and employment compared to those that were not affected by floods. Similarly, Albala-Bertrand’s (2013) study on 28 disasters in 26 countries between 1960 and 1979 found that GDP generally increased by 0.4% with a higher capital formation and an increase in agricultural and construction output. While fiscal and trade deficit increased, inflation did not change, suggesting natural disasters had a neutral or positive effect on economic growth.

Postdisaster government assistance and aid can be used by the private sector to upgrade their capital investment and new technology—thus increasing their productivity level—and individual firms can be better off during postdisasters because payments by governments can be used for rebuilding and reconstruction (Kousky, 2014). At the macro level, according to Cavallo et al. (2010), the negative shock caused by major disasters “can be catalysts for re-imbursement and upgrading of capital goods” (p. 2). Birkmann et al. (2010) argued that natural disasters can trigger change and a “window of opportunity” for building more resilient communities (i.e., replacement, renovation, and repair). For example, the affected economy will replace outdated equipment and structures, which, in turn, improve their labor and capital productivity after major disasters. Moreover, in an economy with extensive compensation through insurance coverage and reimbursement, the inflow of compensation generates reconstruction activities that spill over to other sectors (Von Peter et al., 2012).

An alternative perspective argues that the destruction brought about by major disasters may lead to a temporary boom in the private construction sector. In the wake of a disaster, excess demand over supply of housing can create profit opportunity, which can lead to temporary boom in the rebuilding and reconstruction sector (an additional finding validating the arguments of disaster capitalism). Vigdor (2008), for example, found that housing stocks in New Orleans were affected by Hurricane Katrina (i.e., two thirds of the city’s housing stock were uninhabitable). Outside New Orleans, about 12,000 housing units were lost and 50,000 left vacant. These findings suggest that a reduction in supply of housing often exceeds demand, which led to a general increase in rental properties and thus a temporary construction boom.

Loayza et al. (2012) noted that the positive impact of disasters can vary by type of disasters and by sector of businesses (Fomby et al., 2013; Guimaraes et al., 1993; Fomby et al. (2013) found that while droughts tend to have a negative effect in developing countries, floods tend to have a positive effect. Loayza et al. (2012) found that droughts and storms tend to have a negative effect on the agricultural sector, but floods have a positive effect by about 1%. A previous study found that forestry and agricultural sectors often sustained greater loss, while retail, transportation, and public utility income declined immediately after a disaster but stabilized after a year (Guimaraes et al., 1993).

Disaster Preparedness Among Private-Sector Businesses

Disaster preparedness is essential to minimize disruption of businesses after disasters. FEMA acknowledges that while about 25% of businesses do not reopen after disasters, having an emergency disaster plan and a continuity of operations plan can reduce the risk and help businesses recover faster (FEMA, 2018b). Overall, FEMA (2018b) lays out 10 general recommendations for survival for businesses—they include having backup communication plans and flexible work options like teleworking for possible disruptions, having copies of essential documents/employee contact information, planning to protect essential infrastructure, establishing networks with the community or local officials, establishing standby contracts, and enhancing financial preparedness. The next two subsections examine disaster preparedness among businesses in further detail under two categories—business continuity planning and financial preparedness.

Business Continuity Planning

Having a business continuity plan is one of the essential steps in disaster preparedness. FEMA reported that out of all the businesses damaged by Hurricane Andrew in 1992, 80% did not have a business continuity plan (Cerullo & Cerullo, 2004). While increasing frequency of natural disasters is a concern, an increasingly globalized world further necessitates the need of business continuity plans. Supply chains are vulnerable to disruption by natural disasters, and globalization of supply chains has meant that disruptions to production in one geographical location can have impacts on businesses in other regions of the world. For instance, in their study of the Great East Japan Earthquake, Ye and Abe (2012) found that the disaster impacted Japan’s “both upstream suppliers in developing countries and end customers in developed countries, as both demand signal and supply flows were severely disrupted” (p. 11). For example, while Japanese automobile production declined in the aftermath of the earthquake, a similar decline in automobile production happened in countries like Thailand, Philippines, and Malaysia because of disruption of supply chain networks with Japan.

According to Cerrullo and Cerullo (2004), a business continuity plan aims to eliminate or reduce the negative consequences of a disaster before it happens. The objective is to reduce the time it takes for a firm to recover from a disaster and restore its functions to its normal business operation. At the most basic level, a business continuity plan consists of “business practices that provide focus and guidance for the decisions and actions required for a firm to prevent, mitigate, prepare for, respond to, resume, recover, restore, and transition from a crisis event” (Zsidisin et al., 2005, p. 3404).

The planning process involves the following components (Cerullo & Cerullo, 2004): first, identifying major risks associated with business interruptions. For instance, identify critical functions of the business and risk associated with the probability of occurrence and the impact such an interruption might have on the business.

The second step is to develop a plan that will reduce the potential damages or interruption based on the identified risk. For instance, the business continuity plan can specify the procedures and task assignments necessary to ensure that business is functioning as “usual.” FEMA’s recommendation on these tasks and procedures includes establishing standby contracts to overcome possible supply chain disruptions, having a plan for identifying and prioritizing protection/maintenance/repair of essential equipment and services, and having a plan for delegation of tasks and leadership roles to fill in for possible workforce shortage during disasters.

Finally, training personnel and testing the plan are crucial (i.e., making sure that employees know what needs to be done during response, test the functional operations of the business under realistic conditions, and address weaknesses of critical functions).

Financial Preparedness

Public expenditure on emergency relief/aid and assistance plays a significant role in financial recovery of businesses after disasters. This is particularly important in developing countries since few businesses have insurance. De Mel et al. (2012), for example, using the 2004 Sri Lankan tsunami, examined the prevalence of relief aid (cash grants) and argued that relief aid played an important role in business recovery. This is particularly the case in the retail sector compared to businesses that are classified in the manufacturing and service sectors because grants to small businesses were argued to stimulate more retail activities through spending, which is crucial to recovery.

For small business entities (with fewer than 500 employees) in the United States, low interest disaster loans from Small Business Administration (SBA) are important to help with cash flow. However, there are barriers to apply for the SBA loans (Runyan, 2006). Some of the identified barriers are (a) bureaucratic red tape related to meeting the requirements to submit financial statements and income tax returns as part of the loan application, (b) loss of records and statements by business owners due to disasters or destruction of their premises, and (c) lack of experience among many small businesses with the borrowing application on financing operations (Runyan, 2006). Other challenges include time pressure to make decisions (waiting for FEMA and building codes) and dealing with landlords who are not reluctant to rent the business space to other business owners.

Consequently, the more proactive option for local businesses is to develop a string of financial preparedness, which can be defined as transfer of risk arranged for ex ante or “various payments by insurers to reimburse individual losses” (Von Peter et al., 2012, p. 3). For instance, Von Peter et al. (2012) argue that there are advantages of insurance over foreign aid assistance. First, the nature of the compensation—replacement/repair of damaged property and infrastructure—helps spur economic activities and contributes to growth. A second round of effect can facilitate investment, which leads to a spillover to other sectors, particularly in complementary sectors. Second, the insurance companies can provide incentives to the business community to adopt preventive measures (i.e., insurance companies provide incentive for businesses to advance and install building codes). They also can assign experts with technology knowhow to disaster sites and offer their expertise on how improve and mitigate future losses. In this sense, insurance companies can encourage the transfer of valuable knowledge.

Challenges to Disaster Preparedness Among Private-Sector Businesses

There are certain barriers for private businesses to adopt preparedness (Han & Nigg, 2011; Landahl, 2013; Landahl & Neaves, 2016). The ability of a firm to take a proactive decision on financial and operational preparedness can be influenced by organizational-level constraints and individual motivation and behaviors. Organizational-level factors can include firm size, firm age, location patterns (franchise, chain, multiple-sites type vs. single-site location business), property ownership (leased vs. owned business), financial conditions, sector differences (wholesale, retails, real estate, manufacturing, construction, finance/insurance), and previous experiences with disasters. For example, Han and Nigg (2011)—who examined businesses decision and their disaster preparedness after the 1989 Loma Prieta Earthquake—found that previous experience with natural disaster impacts the likelihood of a firm to prepare for disasters (earthquake). They also found that old firms tend to be less prepared in disaster planning compared to younger firms. Firms in the insurance and finance sector are more likely to have disaster preparedness than wholesale/retail companies.

Han and Nigg (2011) found that the size of a firm also influenced the likelihood of preparedness because larger firms have more resources than smaller firms. A similar argument was developed by Landahl (2013), who found that there are marked differences between large and small businesses with respect to preparedness and response: (a) access to expertise—larger firms can access expertise from off-site in security and emergency management compared to small business owners, who depend on their own social networks, acquired knowledge, and experience, and (b) the ability to make appropriate decisions regarding preparedness and response is better for larger firms because they have internal and external resources available (i.e., involved in drills and exercises, training of employees).

Another factor challenging firms to adopt a business continuity plan is the characteristics of managers (i.e., risk perception and behavioral adjustment to potential risks), which are associated with their ethnicity, gender, and age. For example, manager’s risk perception is an important determinant reflecting how their decisions are influenced by risk and exposure to future disasters.

Role of Private-Sector Businesses in Disaster Management

Ability of businesses to minimize disruption in the aftermath of disasters is significant for community resilience. The previous section discussed various avenues through which private-sector businesses can prepare themselves for disasters. The role of the private sector in emergency management, however, extends beyond preparedness of businesses to significant contributions to disaster risk reduction and postdisaster response and recovery of surrounding communities. This section examines the role of private-sector businesses in disaster management—specifically, contribution of businesses toward postdisaster response and recovery actions and community disaster risk reduction.2

At a glance, private-sector businesses can play multiple roles after disasters occur by providing assistance to disaster victims (via donation, compensation, reimbursement) and supplying response resources (i.e., supply chain capacities to meet demands) (Brubaker, 2015; Chen et al., 2013; Mitchell, 2006). According to Brubaker (2015), “Through public–private collaboration, the government and the private sector can—Enhance situational awareness; Access more resources and capabilities; Improve coordination; Create more resilient communities and increase jurisdictional capacity to prevent, protect against, respond to, and recover from major incidents; maintain strong relationships built on mutual understanding” (p. 117). In fact, various global frameworks in disaster risk reduction and national emergency management guidelines have emphasized the importance of public–private partnerships in the disaster management arena. These frameworks and federal-level guidelines in the United States are discussed in further detail next.

Global and Federal Policy Frameworks

At the international arena, the key policy guideline for the role of private-sector organizations in disaster-related actions can be found in the Hyogo Framework for Action (HFA) 2005–2015: Building the Resilience of Nations and Communities to Disasters (UNDRR, 2007). The Hyogo framework on disaster risk reduction is important because it calls for public–private partnerships, which encourage the participation of the private sector in reducing the underlying risks related to disasters. The key concept is to encourage meaningful partnerships to enhance community resilience. The successor to the Hyogo Framework is the Sendai Framework, which outlines four main goals on disaster risk reduction over the next 15 years that would “ensure engagement and ownership of action by all stakeholders” (UNDRR, 2015).

In the United States, the role of the private sector has long been recognized by the federal government. For instance, in 1992 and amended in 1999, the Federal Response Plan outlines how the federal government implements the Robert T. Stafford Disaster Relief and Emergency Assistance Act. Although the act specifies a plan on the working relationship between different federal, state, and local agencies, the plan also recognizes the important roles played by the private sector.

Federal agencies are encouraged to take advantage of current partnership relations with the private sector. Businesses, both inside and outside the disaster-affected area, can supply critical resources during response operations, and assist in restoring essential services and rebuilding the economic base during recovery operations.

The U.S. Government also notes,

The private sector is a vital part of the emergency management team. We see the nation’s vast network of business, industry, academia, trade associations, and other non-governmental organizations as equal—and equally responsible—partners in every phase from preparedness to response and recovery to mitigation. The Federal Emergency Management Agency has worked steadily to increase the level of private sector collaboration at all levels.

The National Incident Management System of 2012 also provides a consistent nationwide framework for all level of governments as well as for organizations in the profit and nonprofit sectors to work together to prepare for, prevent, respond to, recover from, and mitigate the effect of disasters. The framework provides a commonality for all actors (components related to planning and management structure) in preparedness and response; it also creates a set of expectations for resources and personnel crucial for a unified command structure.

Other examples of private-sector roles can be found within the context of the National Response Framework amended after 2005 Hurricane Katrina (2008)—which provides federal guideline to the all-hazards approach to response. Regionally, there have been partnerships developed through Urban Areas Security Initiative—to encourage high-threat, high-density urban areas to build regional capacity in preventing, protecting, responding, and recovering from acts of terrorism. Another important statutory framework allowing the private sector to play a role in disaster management is the Presidential Directive 5 (HSPD-5) Management of Domestic Incidents (2003)—which aims “to enhance the ability of the United States to manage domestic incidents by establishing a single, comprehensive national incident management system” (Administration of George Bush, 2003).

Role of Private-Sector Businesses in Postdisaster Response and Recovery

Private-sector organizations significantly contribute toward disaster response and recovery through three major avenues. One way through which private sectors engage in response is through philanthropic contributions—like monetary donations or volunteering (Brubaker, 2015, p. 119). For example, while the federal government provided approximately $60 billion after Hurricane Sandy, donations from private corporations was $141 million (RAND Corporation, n.d., p. 6).

Another avenue is through public–private partnerships. Private-sector organizations can reduce burdens on government agencies during response by sharing responsibilities in relief distribution and providing emergency supplies. Private-sector businesses often have the capacity to respond rapidly because of a wide supply chain net and in cases where they are in close proximity to disaster sites (Brubaker, 2015). In fact, FEMA regularly outsources both support (like communications, security services, business consulting) and core (like providing ground and air ambulances, maintaining mobile homes and mass shelters, and engaging in small infrastructure repair projects) emergency management functions to private-sector businesses (Rademacher, 2011). Similarly, as a part of the Indonesian government’s tsunami preparedness plan, private hotel associations have agreed to open their hotels to local people who are unable to reach safe evacuation sites during emergencies (Twigg, 2015).

Finally, the private sectors can partner with local communities and respond to social equity issues in disaster recovery (see Godschalk et al., 1999) by investing in human capital. Small businesses championing local redevelopment efforts are argued to be more effective than government-led programs (RAND Corporation, n.d.). Redevelopment efforts through active participation of businesses can create a culture of innovation, provide community-driven solutions, and enhance social capital within communities.

Role of Private-Sector Businesses in Disaster Risk Reduction (DRR)

Private-sector businesses can play a significant role in disaster risk reduction. The UNDRR (2011) states that a private sector that is committed to disaster risk reduction can “steer public demand toward material, systems, and technological solutions to build and run resilient communities” (RAND Corporation, n.d., p. 5). Companies can often extend their emergency management functions to include employees and their families. For example, Walmart uses its website to promote preparedness among employees and post tips about disaster shelters and other related information. These initiatives can build a culture and knowledge base of DRR practices among the employee base.

Businesses have also contributed toward building resilience of vulnerable communities by directly serving these communities. For example, banking companies like Citigroup are committed toward building financial preparedness among “the unbanked” to aid the economic recovery process after disasters. Private sectors can also aid filling in the gap created by inaccessibility of postdisaster assistance and mitigation programs among minorities and the poor by providing more flexible financing options that bypass administrative hurdles present in accessing government aid and programs (RAND Corporation, n.d.).

Private-sector businesses can also effectively contribute to DRR by extending long-term emergency management services beyond their employee or client base to that of the surrounding community—specifically, reducing vulnerability and disaster risks in society (Twigg, 2015). The next two subsections highlight the private sector’s contribution toward building social capital and community resilience as effective components of disaster risk reduction.

Role in Building Social Capital

The term “social capital” refers to “social resources which people draw upon to pursue their objectives” (Twigg, 2015, p. 120). These social resources comprise networks and connections made with other individuals or organizations and are relationships of trust and exchange. The concept of social capital, for the most part, captures the notion of access generated through the development of relationships (i.e., the ability to gain access to tangible and intangible resources). Here, social capital refers to investment that one makes through the development of relationships. In some instances, such investment is assumed to yield private benefits; in other instances, social capital can produce economic and social benefits to the collective or a group in achieving a common goal. For example, Coleman (1988) defines social capital as “a variety of different entities, with two elements in common: they all consist of some aspect of social structure, and they facilitate certain actions of actors—whether personal or corporate actors—within the structure” (p. 598). Putnam (1995) defines social capital as “features of social organization such as networks, norms and social trust that facilitate coordination and cooperation for mutual benefit” (p. 67).

Scholars have argued that social capital is crucial in emergency management (Kettl, 2006; Sanyal & Routray, 2016; Uekusa et al., 2022). Individuals can draw upon preestablished social networks for mutual support during a crisis (Uekusa et al., 2022) and coping with stress (Bhandari, 2014). Similarly, studies have also indicated that communities with higher levels of social capital are better prepared, exhibit efficiency in flow of information and decision-making during response (Bhandari, 2014), and are able to better address numerous aspects in recovery (Aldrich, 2012; Ganapati, 2012; Hawkins & Maurer, 2010; Nakagawa & Shaw, 2004; Xiao et al., 2022).

Higher levels of social capital can encourage various stakeholders to be actively involved in organization of tasks and responsibilities during the planning process, as guided by social norms and expectations. For example, Buckland and Rahman’s (1999) research on three communities in Canada along the Red River flood plain found that social capital generated from higher levels of civic engagement had enabled communities to better prepare for floods and more effectively respond during the 1997 flood. Building social capital requires a collaborative planning process that involves social interactions between private-sector organizations, nongovernmental organizations, public officials, and the local community.

Overall, interpersonal relationships among close-knit social structures are fundamental aspects of emergency management because socialization enhances communication, informal norms, and cohesive structure. Participants can also minimize the costs of monitoring and enforcing ethical and moral obligations when they work collaboratively across sectors. Interpersonal relationships can emerge through continuous social interactions between individual actors, or when stakeholders exchange information, technical skills, and specialized resources. Having an informal arrangement allowing stakeholders to learn and adapt to their local circumstances rather than being imposed by a centralized hierarchical structure can further aid the process (Kettl, 2006).

The private sector can play an important role in building community and social capital—especially small businesses. Besser and Miller (2013) argue that small businesses have a personal and economical stake in local communities. Owners and managers of small businesses are likely to live in the town wherein their businesses are located and have a direct connection to the public and social amenities available within the community. Consequently, they are more likely to invest in welfare and prosperity of the community. In fact, Rademacher (2011, p. 19) argues that in order to minimize opportunistic behavior of the private sector (as established by the concept of disaster capitalism), emergency management functions contracted out by government agencies should be provided to businesses that have a stake in the local community.

One way through which private-sector businesses can build community and social capital is by building group cohesiveness—that is, “the extent that group members are motivated to advance the group’s continuity or well-being” (Tulin et al., 2018). The assumption is that socializing with other network actors can encourage everyone to follow an agreed set of planning procedures and network goals. The most likely avenues for effective emergency planning, in this case, are through the community and the partnership between multiple stakeholders—that is, developing communication and learning within the community that is being served and the organizations that are acting in tandem to provide the assistance (Robertson & Acar, 1999).

Kapucu (2015), similarly, highlights the importance of networking among all levels of stakeholders through the “whole community approach” in emergency management. Networking with diverse community actors provides an opportunity for communities to identify challenges of politics, power, and economic conditions. The sources of social capital allow experts and local leaders and organizations to develop dialogues on how to combine much-needed resources as well as reduce role confusion in disaster response (Kapucu, 2015). The relationships that are built prior to disasters and maintained over time can also develop a sense of trust among individuals and organizations in the community (i.e., trusted sources of information). Social capital helps the community to work together to develop appropriate solutions and have members of the community to work for the common good (Kettl, 2006).

Similarly, private-sector organizations can also provide infrastructure that serves as a meeting point for various stakeholders in emergency functions and create a norm of engagement and social support during disasters. For example, Andrew et al. (2016, p. 71) noted that during the Thailand floods of 2011, a news media company took responsibility to serve as a central hub to distribute relief like bottled water, clothes, and food to disaster victims. This action eventually galvanized other private corporations to set up their own sites.

Role in Building Community Resilience

Private-sector businesses can contribute toward community resilience through three major avenues—by undertaking preparedness measures that improve their own resilience, by having direct involvement in actions that improve community resilience, and by decreasing community vulnerability. McKnight and Linnenluecke (2016) divide response of private-sector businesses into two categories—firm centric and community centric (see Adekola & Clelland, 2020, p. 51). Firm-centric behaviors prioritize needs of businesses during a disaster (like having a business continuity plan) that can have larger positive impacts on the community, and community-centric actions involve those that directly benefit communities. While firm-centric actions are taken to ensure continuity of operations in the aftermath of disasters, community-centric actions can be motivated by reputational benefits to the business, or sense of moral and compassionate duty to the community. The three avenues for contribution to community resilience are discussed in further detail:

Preparedness of businesses: Private-sector businesses can contribute toward community resilience by preparing for their own continuity of operations in the aftermath of disasters. Continued operations can help in retaining revenue streams, providing employment within the community, addressing needs of the community, and maintaining the confidence of shareholders, customers, employees, and the community at large (McKnight & Linnenluecke, 2016, p. 293). Having adequate preparedness can also minimize supply chain disruptions, thus ensuring continued supply of essential goods and services to the community in the aftermath of disasters. In fact, Stewart et al. (2009, p. 350) notes that supply chain resilience is a significant component of community resilience.

Continuing operations of businesses can have intangible benefits too, like boosting confidence of shareholders, customers, and the community at large (McKnight & Linnenluecke, 2016)—hence contributing to community resilience. Stewart et al. (2009) noted that “it is through the reopening of entities like grocery stores, health clinics, and banks that citizens begin to regain their sense of community and start to recover” (p. 355). For example, Waffle House, a U.S. restaurant chain, stays open after disasters by using mobile generators and offering reduced menus, and they “provide refuge for first responders and customers” (JSTOR Daily, 2020). In fact, FEMA uses the status of the restaurant chain as a symbolic indicator of the severity of disasters and is referred to as the Waffle House Index.

Direct involvement in community resilience: Both large and small businesses can have direct impacts on community resilience. Adekola and Clelland (2020), in their study of the role of small businesses in community resilience in Scotland, found that small business owners were also often members of community resilience groups, or the local flood group, or took part in citizen engagement programs for developing local community resilience plans—thus getting directly involved in decisions pertaining to community resilience. Similarly, local businesses often help with storing disaster response items, like sandbags for community usage during floods, or help with hosting databases on vulnerable communities (Adekola & Clelland, 2020; McKnight & Linnenluecke, 2016). In summary, small businesses can be significant actors in community social networks, thus building social capital and improving community resilience.

Additionally, small businesses often take initiatives to improve built environment resilience. For example, in the United States, local chambers of commerce are collaborating with local governments to invest in green infrastructure, smart growth, and community redevelopment projects that provide communities with better quality of life; attract new businesses, leading to increased economic activity in communities; and improve community resilience to climate change impacts (Deloitte, n.d.; Kramer, 2014).

Alternatively, larger corporations often directly contribute to community resilience through corporate philanthropy and corporate social responsibility policies (Adekola & Clelland, 2020; McKnight & Linnenluecke, 2016). The new generation of business leaders is motivated to significantly contribute toward sustainable development (BSR, 2018; Moon, 2007). Private organizations are leading initiatives in waste reduction initiatives, emission reductions and pollution control, community development, and charitable giving as part of their sustainable development initiatives (Sheehy & Farneti, 2021). For example, larger corporations like Bank of America, Google, Walmart, and Hewlett-Packard have already committed to green practices, like using environmentally friendly methods and products, and investment in green buildings and infrastructure for pollution control (McGrath, n.d.). Similarly, IBM focused on long-term community resilience by providing the Smarter Cities Challenge grant in Japan after the 2011 earthquake and tsunami.

Reducing community vulnerability: Finally, the private sector can have an indirect influence on community resilience by reducing community vulnerability (Adekola & Clelland, 2020). Community vulnerabilities are exacerbated through income inequalities, low income, lack of access to health insurance, affordable housing, and other social infrastructure (Cutter et al., 2014). When businesses effectively partner with local government agencies and move beyond philanthropic contributions to investing in economic mobility of surrounding communities, community skill development, and social infrastructure like schools, community spaces, and affordable housing, they are also contributing toward more resilient communities.

Challenges to Private-Sector Involvement in Disaster Management

Private-sector businesses can face four major challenges when participating in disaster management actions. First, while businesses may be motivated to participate in long-term resilience efforts, they may lack the knowledge or resources needed for participation. This especially holds true for small businesses, many of which are small or “one-man bands” (Adekola & Clelland, 2020, p. 555). Lack of personnel and resources makes it challenging for these businesses to take time away from business activities to volunteering in community resilience-building efforts.

Oftentimes, resilience efforts may be complex, and businesses may not have the knowhow to participate in such actions. For example, in the field of green building certification (which is an important component of sustainable development), application for the Leadership in Energy and Environmental Design (LEED) program is associated with a high load of paperwork and a complex certification process, consequently making it challenging for developers who are new to the field of green building practices. Alternatively, studies have also indicated that developers who are looking forward to switch to green building practices may be discouraged because of lack of knowledge required to transition to new building methods (Marker et al., 2014).

Second, surrounding norms may also inhibit certain businesses’ motivation to contribute toward community resilience. Adekola and Clelland (2020) noted that small businesses reported not being involved in resilience efforts (beyond safeguarding their own property) because of lack of participation of other businesses in the community. This finding aligns with the social capital literature that emphasizes that partnerships and repeated socialization among community stakeholders can facilitate trust and cultural norms of participation in emergency management functions (as discussed in “Role in Building Social Capital”). The need for developing social capital among community stakeholders, therefore, further emphasizes the role of government agencies to facilitate intersectoral partnerships and even formalize role of the private sector in various stages of disaster management (see Hunt & Eburn, 2018, p. 484).

Third, businesses may also lack foresight and choose short-term profits over long-term investment in green development. For example, despite rising frequency of coastal extreme weather events, coastal development across the country is booming (U.S. News, 2017) because of immediate economic gains from tourism and real estate activities. In fact, as highlighted in the “Postdisaster Positive Economic Impacts” section, certain businesses may profit from disasters (disaster capitalism). Others, especially large corporations, may even choose not to participate in community resilience—for example, in their study of private-sector participation in community disaster risk reduction practices in Sierra Leone, Kenya, and Bangladesh, Clark-Ginsberg (2020) found limited involvement in all three cases. In fact, scholars have also noted that corporate philanthropy in the form of donations and providing relief in the aftermath of disasters may be motivated by an attempt to restore organizational reputation, instead of long-term sustainable development of the surrounding community (see Muller & Kraussl, 2011; Twigg, 2015).

Finally, public–private partnerships are associated with collective action risks and are discussed extensively in the literature. According to Baba et al. (2014), it is difficult to coordinate joint activities among stakeholders, particularly efforts to align risk reduction practices related to multiple hazards. For example, the administrative fragmentation nature of the federal system in the United States makes coordination difficult across multilevel government agencies from local to state to federal level. The administrative fragmentation generates issues related to program oversights, regulations, and mandates attached to partnerships. Another potential barrier is related to local autonomy. The delegation of responsibilities and the difficulty to distinguish who will be made accountable for different actions can present a challenge for stakeholders working in a public–private partnership, that is, the tasks of developing an appropriate planning document for the whole group. A higher-level government’s solution to the basic dilemma of how to achieve common goals often presents local hostility. Directives are often difficult to monitor and enforce through remote control.

Moreover, Baba et al. (2014) pointed out that, given the nature of a large-scale disaster, it is hard for firms to implement risk assessment and evaluations that can be simulated or covered in a large geographical scale without the assistance of local and national governments. While the partnership can be developed by local firms and various stakeholders (i.e., by considering local circumstances), such joint efforts may lack overall consistency and conventionality of a larger emergency response framework. Indeed, there are also the problems of allocating resources, particularly for the administration of tasks of members of the partnership. The allocation of resources depends on the stability of a partnership structure. Depending upon the types of partnership (formal or informal), there are risks related to consistency of leadership roles within a partnership.

One related argument is linked to the scope of the public–private partnership itself. A public–private partnership that is too broad, involving too many stakeholders, may be less effective if the scope lacks definition and the parameters are problematic to identify. In such cases, stakeholders cannot identify predetermined tasks and develop outcomes measurements for the operationalization of the plan. On the other hand, if a partnership is too specific and is established at the expense of excluding others, it too can be hard to implement fully.

There are also barriers related to organizational culture. Andrew and Kendra (2012), for example, argued that administration of a partnership is not easy during emergency response because of professional cultures as well as different language or terminology used by different professions. Language and cultural barriers often hinder a meaningful partnership. Issues related to interorganizational trust between individuals in a partnership also matter (Schneider, 1992). Finally, another major barrier is related to potential legal liability. It is not clear how members of a public–private partnership would deal with legal liability.

The Future of the Private Sector in Disaster Management

Private-sector businesses are crucial stakeholders in community disaster management policies. At the same time, with increasing frequency of extreme weather-related events, businesses are becoming increasingly vulnerable to disruption or even permanent closures in the aftermath of disasters. Businesses can minimize disruption following disasters by taking certain preparedness measures—specifically, by having a business continuity plan, and through financial preparedness measure like (see “Disaster Preparedness Among Private-Sector Businesses”). In fact, minimizing the risk of disruption is an important step toward the contribution of the private sector in community disaster risk reduction practices. Continued operation can ensure continued employment, as well as production of essential goods and services, and has intangible benefits like boosting community morale—all being significant contributors toward community resilience. Businesses are also often engaged in philanthropic contributions through monetary donations and volunteerism during disaster response. Additionally, businesses can directly contribute toward long-term community resilience by participating in community resilience–related planning, committing to sustainable development practices, building social capital, and reducing community vulnerabilities by providing employment, skill development, and other social services.

Not all private-sector organizations, however, participate in long-term community disaster risk reduction initiatives. In fact, studies have found that most businesses limit their involvement to philanthropic contributions during response. Additionally, some businesses may treat disasters as opportunities for profit—motivated by short-term financial profits and an outcome of the massive outsourcing of disaster management services to the private sector.

Future scholarship and practice in the arena of the role of the private sector in disaster management can examine three major topics. First, the link between business resilience and community resilience needs to be explored further (Hunt & Eburn, 2018; McKnight & Linnenluecke, 2016). The “Challenges to Private-Sector Involvement in Disaster Management” section highlights that businesses are primarily involved in short-term philanthropic contributions after disasters instead of long-term participation in community resilience. Other factors like choosing short-term profits over long-term investments in resilience, lack of participation among other businesses (institutional norms), or treating disasters as business opportunities can also hinder participation of businesses. With the private sector being an important stakeholder in community development, future research can explore factors that can motivate meaningful engagement of businesses in long-term community disaster risk reduction practices. Additionally, government agencies can also explore effective ways to strengthen long-term partnerships with businesses in community resilience and disaster risk reduction (see Hunt & Eburn, 2018; SDRP, 2018).

Second, future research can examine the role that the private sector can play in incentivizing sustainable practices for government agencies and local communities, as well as the impact of such incentivization. Private-sector think tanks and larger corporations often provide grants and funding for sustainable development policies/research (see “Role in Building Community Resilience”). Another avenue of interest is the role of private credit rating agencies. Investor agencies are taking existing climatic threats and hazards, as well as resilience of communities to these threats, as important components of their credit analysis of communities (Smart Surfaces Coalition Report, n.d.). While very few credit downgrades have been reported so far from disasters, Reuters (2017) reports that increasing impact of climate change will prompt more investor agencies to consider disaster preparedness of communities when grading them. Consequently, future research can examine the motivation of government agencies to take actions for improving community resilience to not risk downgrading of their jurisdiction’s credit ratings.

Finally, there is a need to explore practical implementation of knowledge in private-sector involvement in community disaster risk reduction. In fact, Weichselgartner and Pigeon (2015) point out the gap and the subsequent need to integrate research findings and DRR policies and programs. Cadag and Gaillard (2012) examine the challenges associated with integrating knowledge and practice in DRR—specifically, the need to integrate local knowledge of communities at risk and scientific knowledge, as well as the need to integrate top-down and bottom-up decision-making in practice (p. 105). The same holds true for public–private partnerships in disaster management—effective implementation of such partnerships will require bridging scholarship on the role and impact of private-sector businesses in disaster management and the subsequent implementation of programs that encourage and guide such partnerships.

Further Reading

  • Brubaker, J. (2015). Private sector’s role in emergency response. In A. Jerolleman & J. J. Kiefer (Eds.), The Private sector’s role in disasters: Leveraging the private sector in emergency management (pp. 105–130). CRC Press.
  • Cerullo, V., & Cerullo, M. J. (2004). Business continuity planning: A comprehensive approach. Information Systems Management, 21(3), 70–78.
  • Chandra, A., Moen, S., & Sellers, C. (2016). What role does the private sector have in supporting disaster recovery, and what challenges does it face in doing so? RAND Corporation.
  • Fletcher, R. (2012). Capitalizing on chaos: Climate change and disaster capitalism. Ephemera: Theory & Politics in Organization, 12(1/2), 97–112.
  • Han, Z., & Nigg, J. (2011). The influences of business and decision makers’ characteristics on disaster preparedness—A study on the 1989 Loma Prieta earthquake. International Journal of Disaster Risk Science, 2(4), 22–31.
  • Hawkins, R. L., & Maurer, K. (2010). Bonding, bridging and linking: How social capital operated in New Orleans following Hurricane Katrina. British Journal of Social Work, 40(6), 1777–1793.
  • Helgeson, J. F., Aminpour, P., Fung, J. F., Henriquez, A. R., Zycherman, A., Butry, D., Nierenberg, C., & Zhang, Y. (2022). Natural hazards compound COVID-19 impacts on small businesses disproportionately for historically underrepresented group operators. International Journal of Disaster Risk Reduction, 72(2022), 102845.
  • Kapucu, N. (2015). Emergency management: Whole community approach. In D. A. Bearfield & M. J. Dubnick (Eds.), Encyclopedia of public administration and public policy (3rd ed., pp. 1–6). Taylor & Francis.
  • McKnight, B., & Linnenluecke, M. K. (2016). How firm responses to natural disasters strengthen community resilience: A stakeholder-based perspective. Organization & Environment, 29(3), 290–307.
  • Rademacher, Y. (2011). Outcontracting in emergency management: More than a business conundrum. International Journal of Disaster Risk Science, 2(4), 15–21.
  • Twigg, J. (2015). Disaster risk reduction. Overseas Development Institute, Humanitarian Policy Group, London, England.
  • Uekusa, S., Matthewman, S., & Lorenz, D. F. (2022). Conceptualising disaster social capital: What it is, why it matters, and how it can be enhanced. Disasters, 46(1), 56–79.

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Notes

  • 1. Although this estimate was “somewhat higher than the U.S. Census (2012)” (see Shrank et al., 2013, p. 2366), of employer firms with employees between 1 and 250 employees (i.e., about 11.2%), this figure might be underestimation of businesses that closed down after the disaster.

  • 2. van Niekerk (2006) categorizes the disaster management cycle into two components—the predisaster reduction phase (also termed as DRR) and the postdisaster recovery phase that includes actions pertaining to rescue, relief, and recovery after occurrence of disasters. The United Nations International Strategy for Disaster Reduction (2009) defines DRR as the concept and practice of reducing disaster risks through systematic efforts to analyze and manage the causal factors of disasters, including through reduced exposure to hazards, lessened vulnerability of people and property, wise management of land and the environment, and improved preparedness for adverse events.