The risk of wildfires to business property and equipment persists in the Wester US, as it endures record heat and severe drought. The risk is exacerbated for businesses lacking in climate resilience. In a 2020 survey of the world’s top CEOs and CFOs, commissioned by insurer FM Global, three in four respondents admitted that their companies are not fully prepared for the adverse financial impact of a changing climate, with 76% saying their organisations are somewhat to significantly exposed to climate risk.

Wildfires were cited as one of the top three climate-related exposures that “concern their companies the most” and “could most negatively affect their financials”.

“It’s important to assess all of these risks well ahead of an imminent wildfire threat,” said Katherine Klosowski, FM Global’s vice-president and manager, natural hazards and structures engineering, “Wildfires move quickly. When the flames are close, it’s often too late.”

FM Global recommends businesses prioritise five actions to reduce the risk of business interruption and loss from wildfire.

Reduce wildfire-related BI: Top five actions (Source: FM Global)

1. Clear vegetation
Remove vegetation close to buildings, including lower and overhanging branches, shrubs and fallen limbs beneath trees. Even lawn mowing helps. Check gutters and vents for pine needles, dust, lint, dry mulch and leaves.

2. Remove vulnerable outdoor storage
Stow all unsecured plastics and wood, including trash cans, outdoor furniture and debris. Yard storage can be placed into metal shipping containers. Safely store or relocate ignitable liquids. Also, look for combustibles in unexpected places like crawl spaces.

3. Secure the building envelope
Close openings, such as windows, doors, roof vents and skylights. Cover vents with wire mesh to prevent flying embers from entering the building.

4. Prepare for Operation Shutdown
Plan for safe shutdown of operations and prepare for loss of utilities. Keep fire protection equipment in service; it will help safeguard the facility should any embers find their way into the building. Prioritise actions to ensure safe cessation of the most hazardous processes, such as those using ignitable liquids or flammable gases. Conduct computer back-ups. It’s not just fire that can damage property; smoke particles can, too. Consider shutting down HVAC systems to help safeguard computer equipment and sensitive occupancies.

5. Protect business continuity
For businesses, continuity is a priority. Prioritise risk mitigation in the context of the business’ most important cash flows. Have a plan in place for keeping business running as usual, accounting for the fact that employees may be affected differently by outages depending on where they live. Understand the value of both an emergency response plan (how to react to potential disaster) and a business continuity plan (how to sustain operations amid a potential disruption) prior to an emergency.

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