The Race to Resilience

BY ALBERT SLAP

What is the role of the human element in the lack of progress in city sustainability and resilience?

Resilience is the ability to prepare, adapt, and thrive in a disruptive and changing world. It is the ability to recover from or be resistant to the impact of natural and man-made disasters, as well as the long-term effects of climate change. Resilience is about embracing the changes that we’re encountering. Sustainability is about protecting our resources. And they’re quite different.

Why do I say the “race to resilience”? Why are we talking about existing buildings? Why not just spend time imagining what a resilient future will look like? The short answer is that if we don’t win this race to resilience, we probably won’t succeed in creating a cool, calm future. The fact is that 95% of all existing commercial, multi-family, and industrial buildings are not ready for what Mother Nature is dishing out, let alone what’s coming in 2030, 2050, and beyond. If we can’t help the existing buildings where most of us live and work, how will we get to a better future?

To put things into perspective, since 1980, the U.S. has sustained 298 weather and climate disasters where the overall damage exceeded $1 billion. The total cost was nearly $2 trillion. As of July 9, not including the Western wildfires, 2021 had already seen eight climate disaster events exceeding $1 billion. This means that the annual average of $1 billion disasters has more than doubled in the past 40 years.

America’s “Resilience Deficit”

Approximately 57% of homes, schools, hospitals, office buildings, and factories in the U.S. are located in hazard hot spots. And more than 1 million buildings lie in hot spots for two or more hazards. At the residential level, there are 5 million homeowner flood policies through the National Flood Insurance Program (NFIP), but 40 million to 60 million homes are actually at risk of flooding.

There are very few, if any, standards or even industry best practices for commercial real estate due diligence for natural disasters. There’s a lack of private risk-mitigation investments and government tax and financial incentives or insurance programs to incentivize risk-mitigation investments that we need.

We also lack risk education, the human element. Why aren’t we doing more on the resilience level? Some people say that we’re drowning in data and starved for knowledge. I think that is an accurate description.

Drivers of Resilience

There is some hope that some things are changing. For example, Security and Exchange Commission Chairman Gary Gensler says investors want mandatory disclosure on climate risks this year. Other drivers of resilience include ASTM International, which sets standards for thousands of different activities around the world; the Environmental Bankers Association, which is advocating for a more holistic process for commercial real estate transactions; and the U.S. Green Building Council, which has a new RELi hazard assessment certification program featuring RiskFootprint technology to provide high-quality climate-risk analyses for buildings, communities, and cities.

Climate Disclosure Domino Effect

As physical climate disclosure becomes a requirement, investors and regulators are going to demand disclosure of physical risks to the assets. The investees must assess their portfolio assets for hazards and climate change impacts and disclose this to investors. The regulators will see the vulnerability and materiality of the at-risk assets and seek more information on plans to mitigate those risks. Then, the investees will develop plans and capital programs to mitigate risks at the asset level, and the investors and regulators will monitor the progress of the investees to reduce risk to assets and profitability over time.

What Should Building Owners, Operators, Investors, and Lenders Do?

They should use new environmental riskassessment tools to better understand floods, natural hazards, extreme weather, and climate risks at the purchase/opportunity, investment, mortgage origination, due diligence stages. And they should consider making resilienceenhancing investments in properties with high risk where there’s a good return on investment.

Together, we can achieve a resilient future, but we have to start the race to resilience now.

Albert Slap

President and CEO, Coastal Risk Consulting

Boca Raton, Florida

Albert J. Slap is co-founder of Coastal Risk Consulting, a geospatial technology, modeling, and analytics company in Plantation, Florida. He is also the President of RiskFootprint, a technology startup that provides online hazard assessments and resilience accelerating advisory services for properties in the U.S. Slap was a nationally recognized environmental attorney whose Clean Water Act suits brought billions of dollars of reinvestment into wastewater treatment plants and created tens of thousands new construction jobs.