World leaders have just finalized new guidelines on how countries can address increasing natural disasters related to by extreme weather. For the first time, the framework also shows how the private sector can boost its climate resilience.

A total of 186 governments attended Third UN world conference on Disaster Risk Reduction (DRR) in Sendai this week to discuss reducing disaster risk and prevention, and adopt the new 15-year-long global plan. It will replace the 2005 Hyogo Framework for Action (HFA) to be known as HFA2.

According to a United Nations report, the economic impact of natural disasters amounts to US$200-250 billion per year, which means more investment is needed to act on prevention, rather than on the post-disaster phase.

The Climate Group CEO Mark Kenber has warned that inaction on the issue can have huge economic impacts. commenting:

“If we combine the scientific impetus with the economic benefits of acting on climate change, there’s even less reason to delay action. Action saves money – and inaction costs money. A lot of money.”

The UN report points out that investing US$6 billion in disaster risk management strategies every year would generate total benefits, in terms of risk reduction, of US$360 billion - a 20% reduction of new and additional annual economic losses.

One of the pledges made by country leaders and stakeholders at DRR - which attracted several big companies and investors this year - was the need for closer collaboration between the public and private sectors to fund new emergency plans, improve the security of cities and tackle climate change.

As a result, for the first time, the framework includes the private sector in disaster resilience, in line with five suggestions the insurance industry made in a joint statement during DRR:

• Creation of public-private partnerships is needed both at the local and national levels.
• Insight, data and tools from the private sector can be used as the basis for the public sector to define rules to improve building safety.
• The involvement of the insurance industry can provide necessary information to protect investment and economies, as all financial decisions are risk-sensitive.
• Collaboration between the private and public sectors can raise awareness about DRR among the business community and civil society.
• Models and analytics about risk management, which are already available in the insurance sector, can be shared with the public sector and drive new plans quickly.

Insurance markets a key element

The multi-national insurance company Swiss Re, a member of The Climate Group, attended DRR and signed the statement. During the UN Climate Summit last year, Swiss Re pledged US$10 billion in insurance capacity to improve the climate-risk management of both national and sub-national governments by 2020.

Ivo Menzinger, Head Global Partnerships Asia at Swiss Re said:

"The establishment of healthy insurance markets is therefore another important element in the government toolbox, helping nations achieve their Hyogo Framework commitments. This is the part that helps speed up recovery and reconstruction, reducing the economic hiatus and loss of important development goals that disaster often causes."

Seven global targets to be achieved in next 15 years

The framework outlines seven global targets to be achieved over the next 15 years: a substantial reduction in global disaster mortality; a substantial reduction in numbers of affected people; a reduction in economic losses in relation to global GDP; substantial reduction in disaster damage to critical infrastructure and disruption of basic services, including health and education facilities; an increase in the number of countries with national and local disaster risk reduction strategies by 2020; enhanced international cooperation; and increased access to multi-hazard early warning systems and disaster risk information and assessments.

The World Conference was attended by over 6,500 participants including 2,800 government representatives from 187 governments. The Public Forum had 143,000 visitors over the five days of the conference making it one of the largest UN gatherings ever held in Japan.

Margareta Wahlström, the Secretary-General’s Special Representative for Disaster Risk Reduction and the Head of the UN Office for Disaster Risk Reduction, said:

“The adoption of this new framework for disaster risk reduction opens a major new chapter in sustainable development as it outlines clear targets and priorities for action which will lead to a substantial reduction of disaster risk and losses in lives, livelihoods and health.

“Implementation of the Sendai Framework for Disaster Risk Reduction over the next 15 years will require strong commitment and political leadership and will be vital to the achievement of future agreements on sustainable development goals and climate later this year. As the UN Secretary-General said here on the opening day, sustainability starts in Sendai.”