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Where Does Emergency Food Fit Into My ERM Plan?

Updated: Apr 26, 2023



The Short

  • Emergency food supplies are recommended for companies with at least 20 employees to invest in to ensure the continuity of business functions during and after a disaster.

  • Natural disasters have cost the US $306 billion in damages in 2017 alone, causing lost revenue, property damage, and employee losses.

  • Advanced ERM is essential for healthcare organizations, financial institutions, transportation companies, energy companies, and government agencies to protect their assets and interests.

  • ERM teams must identify and assess potential risks, develop strategies to mitigate and manage risks, communicate risks and risk management plans, ensure compliance with regulations, and continuously evaluate and improve risk management efforts.

  • Emergency food supplies are a key component of Business Continuity Planning to ensure that critical business functions can continue to operate during and after a disaster or disruptive event.


As students of Emergency Management, Enterprise Risk Management, and Business Continuity Planning, we wanted to share some of our own learning over the last few years hoping that some American businesses will jump-start their own risk mitigation planning to better prepare for future disasters.


From an Enterprise Risk Management (ERM) point of view, we recommend that companies with at least 20 or more employees invest in emergency food supplies. Despite the costs, storage requirements, and complex logistics, having emergency food on hand is a small price to pay for the advantages it offers.


Here's why. Over the past two decades, numerous natural disasters have devastated cities and towns across the United States. Hurricanes Katrina and Sandy, wildfires in California and Colorado, and tornadoes in Oklahoma and Texas are just a few examples of the destructive power of nature. The cost of these disasters is staggering - in 2017 alone, natural disasters cost the US $306 billion in damages, according to the National Oceanic and Atmospheric Administration.

Businesses are not immune to these disasters. In fact, they are often hit the hardest, with lost revenue, property damage, and the need to retrain or replace employees who leave for other jobs or towns. For example, Hurricane Katrina caused an estimated $125 billion in economic losses, with many businesses forced to close permanently. The wildfire season in California in 2018 caused an estimated $18 billion in damages and lost economic activity.

Enterprise Risk Management (ERM) is a critical practice that all organizations should implement to protect their assets and interests. While all companies need a risk management plan in place, some organizations need advanced ERM due to the nature of their operations. Here are five types of organizations that need advanced ERM and why:


1. Healthcare organizations - Hospitals, clinics, and other healthcare organizations deal with life-and-death situations every day. It's essential for them to have advanced ERM in place to ensure the safety of their patients and staff during emergencies, such as natural disasters, power outages, or cybersecurity attacks. 2. Financial institutions - Banks, credit unions, and other financial institutions deal with large amounts of money and sensitive data. They must have advanced ERM to protect against fraud, cyber-attacks, and other security threats that could compromise their customers' information and damage their reputations. 3. Transportation companies - Airlines, shipping companies, and other transportation companies face many risks, including accidents, equipment failure, and weather-related disruptions. They must have advanced ERM in place to ensure the safety of their passengers and cargo, minimize disruptions, and protect against financial losses. 4. Energy companies - Power plants, oil refineries, and other energy companies face various risks, including natural disasters, equipment failure, and cyber-attacks. They must have advanced ERM in place to ensure the safety of their employees, minimize disruptions to their operations, and protect against financial losses. 5. Government agencies - Federal, state, and local government agencies face a variety of risks, including natural disasters, cyber-attacks, and security threats. They must have advanced ERM in place to ensure the safety of their employees and citizens, maintain continuity of operations, and protect against financial losses.


While all types and sizes of organizations should invest in ERM to protect their assets and interests, some such as healthcare providers, financial institutions, transportation companies, energy companies, and government agencies, need advanced ERM due to the nature of their operations. By implementing advanced ERM strategies and investing in emergency food supplies, organizations can ensure the safety of their employees, minimize disruptions, and protect against financial losses during emergencies and natural disasters.

However, not all businesses in America consider hiring an ERM consultant or creating minimal plans to help themselves, their employees, and their customers recover from likely disasters. For those businesses who have not, please consider going through the following exercises (built mostly for large organizations and institutions however applicable to all business with at least 20 employees) and focus on those areas that most apply to your organization.

1. Risk Assessment and Identification: The ERM team must identify and assess all potential risks and their impact on the organization. This includes identifying operational, financial, legal, and strategic risks. 2. Risk Mitigation and Management: The ERM team must develop strategies and plans to mitigate and manage identified risks. This includes creating policies and procedures, implementing controls and safeguards, and developing contingency plans. 3. Communication and Reporting: The ERM team must communicate risks and risk management plans to all relevant stakeholders, including senior management, board members, employees, and external partners. This includes regular reporting on the status of risk management efforts. 4. Compliance and Regulatory Management: The ERM team must ensure that the organization complies with all applicable laws, regulations, and industry standards. This includes monitoring regulatory changes and ensuring up-to-date compliance policies and procedures. 5. Continuous Improvement: The ERM team must continuously evaluate and improve the effectiveness of the organization's risk management efforts. This includes reviewing and updating risk management plans, monitoring risk trends, and implementing best practices.

So where does emergency food fit into this ERM process? It fits into the Business Continuity Planning (BCP) part of ERM. It is the process of creating a plan that ensures critical business functions can continue to operate during and after a disaster or disruptive event.

Emergency food supplies are a key component of a BCP, ensuring employees can access food during emergencies, even if supply chains are disrupted. This can help keep employees on site, reduce the need for costly evacuations, and minimize the disruption to business operations. In addition, emergency food supplies can also help communities affected by natural disasters and contribute to the overall social responsibility of the organization.

Therefore, integrating emergency food supplies into a comprehensive BCP is essential to ensure the continuity of critical business functions during and after a disaster or disruptive event.

With a stockpile of non-perishable food items, businesses can ensure that their employees can access food during emergencies, even if supply chains are disrupted. This can help keep employees on site, reduce the need for costly evacuations, and minimize the disruption to business operations.

For example, when Hurricane Maria devastated Puerto Rico in 2017, many communities were left without food or clean water for weeks. Having emergency food supplies on hand could have helped these communities get through the immediate aftermath of the disaster.

Of course, costs are associated with storing and maintaining emergency food supplies. But the cost of not having them can be much higher. A 2015 study found that four dollars in damages are avoided for every dollar spent on disaster mitigation.

So if you're a CEO of a company with at least 20 or more employees and have researched to see the likely disaster you can anticipate and prepare for in your area of the country, we urge you to consider investing in emergency food supplies. Not only can it help mitigate the risks of natural disasters, but it can also help your business and the communities you serve recover more quickly from these disasters. The costs and logistics may seem daunting, but the benefits are well worth it.


REFERENCES


1. FEMA's Disaster Declarations: https://www.fema.gov/disaster-declarations 2. NOAA's Billion-Dollar Weather and Climate Disasters: https://www.ncdc.noaa.gov/billions/ 3. National Centers for Environmental Information (NCEI): https://www.ncei.noaa.gov/ 4. Centers for Disease Control and Prevention (CDC): https://www.cdc.gov/ 5. United States Geological Survey (USGS): https://www.usgs.gov/ 6. The Centers for Medicare & Medicaid Services (CMS): https://www.cms.gov/ 7. The American Health Care Association and National Center for Assisted Living (AHCA/NCAL): https://www.ahcancal.org/ 8. The National Fire Protection Association (NFPA): https://www.nfpa.org/ 9. Mitigation Saves: 2019 Interim Report: 10.https://www.nibs.org/projects/natural-hazard-mitigation-saves-2019-reportFEMA: Mitigation’s Value to Society: https://www.fema.gov/pdf/hazard/hurricane/2008/gustav/mitigations_value_factsheet2008.pdf

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