1

CONSULTATIVE WORKSHOP

Business Resilience of Micro, Small and Medium Enterprises

11 December 2019, UN Conference Centre, Bangkok

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I. Background The private sector plays a dominant role in driving

investments in a country, within which micro,

small and medium enterprises (MSMEs) account

for the vast majority of businesses and are

responsible for more than two-thirds of

employment. The resilience of the business

community, hence, is both important for the

national development as well as for sustaining the

job creation engine of the country. Such

enterprises, however, are highly vulnerable to

disasters and disaster risk at all scales. A majority

of such businesses have limited awareness of the

advantages of long-term resilience building and

limited capacity to manage disaster risks, mainly

owing to financial, human resource and technical

limitations.

To address some of these challenges, a Technical

Consultation on Business Resilience for MSMEs

was organized at the United Nations Conference

Center in Bangkok, Thailand, on 11 December

2019. 1 The workshop gathered around 30

participants from the Asia-Pacific region,

including ARISE network representatives,

chambers of commerce and industries, academia,

technical experts, and international organizations.

The consultation aimed to explore resilience

pathways for the MSMEs, identifying actions that

can be taken to enhance MSMEs' resilience in the

face of growing disaster risks in the region.

II. Objectives The workshop was underpinned by a theory of

change in which MSMEs not only focus on

minimizing business disruptions, but also ensure

their growth is sustained through risk-informed

investments. To attain this, they must consider a

holistic approach that examines resilience in the

context of their larger socio-economic ecosystem

and how it intersects with geographical and value

1 www.preventionweb.net/go/69379 and www.unisdr.org/archive/69529

chain-based risks while addressing challenges

such as gaps in data, knowledge and governance.

Within this context, the consultative workshop set

out to explore resilience pathways for MSMEs,

Particip

ants at th

e Tech

nical

Co

nsu

ltation

3

identifying actions that can be taken

to enhance MSMEs' resilience in the

face of growing disaster risks in the

region.

The workshop was organized with

the following objectives:

1. Enhance awareness of

business resilience among

MSMEs.

2. Discuss different approaches

to assess and strengthen

business resilience.

3. Identify means to address

data and knowledge gaps to

inform risk management approaches of MSMEs

III. Summary of Discussions

Session 1: Setting the Scene - Business Resilience of the MSMEs Moderator: Bonnie Haskell; Speakers: Asif Ibrahim; Arunabh Mitra; Rhiza Nery

The session explained how the business

resilience of MSMEs is critical to the health of

economies and communities and to the

achievement of sustainable development in the

Asia-Pacific region.

It recommended a paradigm shift in the business

community; to go beyond disaster response

planning towards building disaster resilience. The

participants stressed the need for an ecosystem-

based approach to support the building of MSME

business resilience for sustainable development.

Key Messages:

1. MSME’s role in economies and societies of

Asia-Pacific: MSMEs provide goods and

services (responsible for 60% of the global

GDP) and employment generation. MSMEs in

Asia-Pacific play a critical role in the Global

Value Chain, and the impact of disasters on

MSME cascades to the regional and global

levels since many value chains are sourced

from this region. The employment generated

by MSMEs is also a source of livelihoods, well-

being, and social coherence, especially for

more vulnerable groups since the majority of

the MSME operate in the informal sector, thus

serving as a backbone for the economies of the

region.

2. Numerous challenges face MSMEs: MSMEs in

the region account for upward of 99% of

registered businesses, but they face

challenges due to data gaps, limited access to

services and resources due to their informal

status, and their limited capacity to understand

and manage their risks. These challenges

make it difficult for MSEMs to engage in DRR

even if they are interested..

3. A shared understanding of business resilience

is needed: Terminologies and processes

should be clarified and simplified, and

indicators to measure business resilience

should be developed beyond recovery-related

indicators.

4. Different customized approaches are required

for building MSME resilience. Needs and

perspectives of micro and small businesses in

the informal sector are not the same as those

of medium enterprises. The scale of

businesses also varies from country to country,

which must be taken into account when

Workshop Framework

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developing strategies and tools to assist

businesses.

5. Business resilience literacy and incentives for

investments are both required to ensure

business engagement in DRR. Chambers of

Commerce can play a vital role in raising

awareness among their members and

communicating their needs; CSOs working at

the community level could be in a better

position to reach the informal sector; and

companies of different sizes in the same

industry or cluster can provide peer-to-peer

support.

6. Insurance mechanisms for risk transfer are

limited because in most cases they cover

direct damage caused by disaster but not

indirect damage by business disruption and

associated liabilities. A presentation by

Mitsubishi noted that in Japan, Business

Continuity Plans of many businesses only

focus on response, and not many companies

have plans to continue their critical operations..

Moreover, many businesses in Japan lack

business interruption insurance which cover

loss of revenue and extra expenses , etc.

7. Economic losses from business interruption

need to be better understood in the disaster

needs assessment process to foster recovery

programs that account for livelihood recovery

strategies in all the sectors. MSMEs are

marginalized because they are perceived as

entrepreneurs and thus left out of Post

Disaster Needs Assessments (PDNAs) and

recovery plans.

8. Key risks to MSMEs include Financial,

Strategic, Reputation Damage, Business

Interruption, Liability, and Safety. Damage and

disruption impact assessments on businesses

should be conducted to learn about the extent

of revenue losses and impact on customers.

9. Need for comprehensive yet simple

approaches: MSMEs are limited by capacity

and resource constraints and are unable to

manage complex issues concerning disaster

risk reduction. Hence, there is a need to deploy

approaches that are implementable and simple.

Effective and meaningful collaboration is

required from the business community and

policy-makers to develop comprehensive and

yet practical approaches that are adaptive and

dynamic.

10. Make the case for business resilience to

Governments: Disasters often drive the

business resilience conversation with

governments. Analytical research should be

undertaken the reasons that some businesses

exit the market after a disaster to identify and

promote mechanisms to support business

resilience. MSMEs struggle overall with legal

compliance (tax, employment regulations, etc.)

and would need capacity development to apply

business resilience standards. There is an

urgent need to roll-out incentives, regulatory

enforcement and support mechanisms for

businesses.

Session 2: Approaches to MSME Resilience

Moderator: Elizabeth Petheo, Speakers: Marcus Oxley, Mareike Bentfeld, Mio Kato, Ranit Chatterjee

The ability to learn, prepare and respond form

some of the core resilience characteristics.

Building business resilience is a systemic process

and needs the collaborative efforts of diverse

stakeholders. The informal character of MSMEs

makes entrepreneurs extremely vulnerable to

disaster shocks with limited support available to

bounce back. Policy, strategies, and approaches

need to take into account the realities of the local

contexts in which MSMEs operate. Country

baselines, research, and national and subnational

engagement of MSMEs by the Chambers of

Commerce and CSOs are among the first crucial

steps to advocating that governments formulate

laws, regulations and provide incentives that

support business resilience for MSMEs.

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Key Messages:

1. Business resilience should be looked through

a systemic lens: Businesses do not operate in

isolation and do not manage risks from just

one hazard. Individual businesses are

interconnected with their local environment,

sector and value chains and therefore require

strategic approaches.

2. A combination of approaches to business

resilience is needed to appeal to and be

applicable in multiple contexts. These include

area-based approaches, value chain-based

approaches, and a combination of the two to

include sector-focused and cluster-based

(summation of value chains) approaches.

3. Collect and analyze data on perceptions of

business risks, causes of failure post disaster,

and sources of information that MSMEs rely on

to disseminate information on they can

strengthen their resilience and build back

better. Country-specific baseline data on

MSMEs is required to build tailored

approaches to capacity building and to design

pre-disaster recovery planning that is inclusive

of MSMEs. Big data and crowd-sourced data

offer opportunities to strengthen knowledge.

4. The impact of disaster-related business

failures on households' access to goods and

services, livelihoods, and employment

opportunities would provide a rationale for

governments to intervene in support of

building MSME resilience. National ARISE

networks are in a position to develop a more

refined baseline on MSMEs to inform

programming on business resilience.

5. Business resilience certification (e.g., hotel

resilience) could be linked with insurance

premiums reductions to create additional

incentives for MSMEs to invest in disaster risk

reduction.

6. Approaches to building capacities of MSME in

business resilience should be anchored in

existing organizations (business improvement

districts, chambers of commerce, sector

associations, etc.) and established

communication channels to enhance

awareness and promote investments in

resilience building.

7. Area-recovery plans should be developed to go

beyond business recovery plans: An area-

based approach might be appropriate for a

mixed economy area where disaster risks are

one of the several risks that affect business

and residents (such as disruption of

transportation, rents increase, demands on the

public space, and adverse weather). Different

businesses can be categorized by subgroups,

and business resilience assessment

methodologies can be applied to analyze what

is disrupting supply chains, operations,

markets, and the general public.

8. Needs of MSMEs in the informal sector during

recovery: Market failure, labour shortages,

loss of clients, service disruption, access to

funds, and timely insurance payouts are some

of the issues that determine the recovery time

(or failure) of a business after a disaster event.

Displacement also impacts the informal

sector's ability to recover. Post-disaster need

assessments and recovery plans need to

consider losses beyond damage to assets;

otherwise, they would fail to provide solutions

for informal sector recovery.

9. Sector-focused approaches and interventions

for business resilience should be promoted:

One good practice is the ‘Hotel Resilient’

initiative which aimed to strengthen the

resilience of the tourism sector through the

development of Hotel Resilient Standards,

training programs for hotel managers and

personnel to reduce and manage risks from

climate, natural and technological hazards, and

data analysis based on the Hotel Resilient

Standards and multi-hazard risk models.

10. Break down MSMEs into relevant sub-

categories and customize approaches: Capital,

production size, labour force employed, legal

status, sector, et al., could be a few of the

parameters used for categorizing MSMEs. The

strategy will differ by country, and it is

challenging to have a standardized template for

all these diverse contexts. However, near-

standardized sectoral templates and tools

could be developed for certain sectors, e.g.,

for fishing or manufacturing.

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IV. Pathways to MSME Resilience

Having discussed key issues concerning MSME

resilience, opportunities were identified and

recommendations made around three key

pathways:

1. Addressing data gaps

2. Addressing knowledge gaps

3. Approaches and tools

Annex 1 outlines the results of the consultations

around these three pathways.

Summary

1. Redefining business resilience: The

discourse on business resilience needs to

address both business continuity as well as

resilient investments and move from

‘bounce-back’ to ‘bounce-forward’ and

from ‘survive to thrive.’ This shift and

expansion in focus has implications on the

knowledge, approaches and tools to

business resilience which currently focus

largely on business continuity planning,

which though essential, is only a part and

not the whole solution. Businesses not

only need to strengthen their resilience

when disasters occur but also measure

how their investment decisions are

modifying the levels of disaster risk they

face.

2. MSME entry points: MSMEs are not a

homogenous group, hence there cannot be

a one-stop entry point to such a diverse

group. Nonetheless, business networks

provide a good opportunity to approach

MSMEs at scale. These include Chambers

of Commerce and Industry, ARISE

Networks, Asia Preparedness Partnership,

etc.

3. Financing: MSMEs have limited access to

risk financing while most funding

instruments focus on capital access. The

cost of insurance and delay in payouts

2 https://www.unisdr.org/apmcdrr2020 29 June - 02 July 2020, Brisbane, Australia

impede early action and speedy recovery.

There is a need to focus more on flexible

and small-scale risk financing. Within risk

financing, a suite and combination of tools

are needed to offer preventive and

preparedness measures that enhance

resilience, but also reduce the cost of

insurance.

4. Knowledge and tools: A business case for

MSME resilience needs to be made and

underscored. This includes both easy

access to knowledge and tools as well as

incentives like tax benefits. Benchmarking

resilience standards and certification

facilitate such incentives. It is important to

keep the processes and tools nimble,

considering the size of MSME operations

and their resource base, while ensuring

that the cost of resilience does not exceed

the benefits.

5. Collaboration: To make these work,

businesses need to move from the regime

of competition to the paradigm of mutual

dependency. Resilience cannot be built in

isolation; addressing systemic risks

requires systemic efforts. Governments

need to provide a better regulatory and

operative environment to facilitate

business resilience, while key disaster risk

reduction stakeholders, viz. science and

technology and media organizations,

should be encouraged to collaborate more

with the private sector. Young

professionals in disaster risk reduction

offer a potent resource, including through

entrepreneurship hubs and incubators.

The 2020 Asia-Pacific Ministerial Conference on

Disaster Risk Reduction 2 offers further

opportunities to discuss these points. Participants

agreed on some concrete actions that can be taken

to accelerate the momentum on the topic in the

region:

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Action Responsible entity

1. Enhance knowledge on business resilience

a. Support UNDRR’s Global SME Survey All partner organisations

b. Develop a central repository for guidance and tools

(workspace in the PreventionWeb)

UNDRR

c. Develop at least one publication on MSME Resilience in

2020 (Good practices; baseline information, etc.)

UNDRR with partners

d. Collect baseline information through MSME ministry,

FICCI and Chambers of Commerce in Odisha (typhoon-

affected) and Kerala (floods affected)

ARISE India

2. Strengthen partnership and collaboration

a. Launching ARISE network in Bangladesh Newage Group of Industries

b. Efforts to bring together NDMO, Ministry of Finance,

and SDGs Secretariat

ARISE Japan

c. Build on existing private sector networks in the

Philippines. Provide a concrete agenda with non-

negotiables.

ARISE Philippines

3. Intergovernmental Processes

a. Explore opportunities to integrate business resilience

for MSMEs in the AADMER Workplan. Philippines is

already engaged in the process with ARISE.

ASEAN Secretariat

a. Leverage APCMDRR, including through its first

substantive pillar on Investing in Prevention, to

highlight issues of concern and opportunities to build

MSME resilience

APMCDRR 2020

b. Advocate for the business resilience of MSMEs in the

Pacific Island States

PIPSO

c. ESCAP Task Force could help give access to the

Chambers of Commerce and Trade Associations. (TBC)

ESBN DCRR Task Force

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Annex 1: Opportunities and Recommendations

Topic Summary of Discussions Opportunities Recommendations for Next Steps

1 Addressing data Gap

• Data is there (‘big data age’), but we don’t know how to access/use it

• Need for a common data base and terminology

• Create an incentive for sharing the data, also across silos

• Need for pre, during, and post disaster data • Business need to see the value of investing

in resilience • Basic analysis might already be enough to

trigger decision making

• Work towards having data available in one-stop system, facilitate access and understanding

• Incorporate different sources of data and adjust scope to resources

• Learning from cases that work very well (‘gold standard’)

• Access first what already exists • Conduct a survey of where MSMEs get their information from • How did they find and utilize it share these experiences • Take measures and educate accordingly • Collect knowledge repository on successful case studies (examples from different sizes and industries) • Reaching out and incentivize action

2 Addressing knowledge gaps

Knowledge gaps of: MSMEs • Access to recovery mechanisms • Access to tools, data, information • Understanding of necessity of undertaking risk and vulnerability • Resource availability to undertake works

Anchor organisations • Strengthen knowledge of anchor

organisations • Understanding of business operations and

needs Governments • Engagement methodology • Resource availability to undertake works • Delineate micro, small and medium

enterprise approaches Finance/Insurance • Onerous requirements • Financing limitations/restrictions

• Utilise existing engagement pathways at different levels

• Consolidation of digital platforms and content • Realisation that; • micro, small and medium will require different

approaches • Formal and informal sectors will require different

approaches • Consideration of financial/insurance incentives

for MSMEs

• Revisit Regional/ASEAN/ PIPSO Strategic Roadmap to include business resilience.

• Identify success stories and socialize what works across sectors/ markets/ industries

• Ascertain Government and Chamber of Commerce opportunities to better engage and understand MSME sector

• Commitment to continue development of MSME Resilience discussion with defined timeframe and initial outcomes

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Topic Summary of Discussions Opportunities Recommendations for Next Steps

3 Approaches and tools

• The group discussed the current challenges, opportunities, and possible tools and approaches that can be used to promote the business resilience for MSMEs.

• Opportunities include the integration of business resilience building into the recovery process, formulation of laws and regulations on business resilience, resilience benchmark for insurance, and multi-stakeholder partnerships.

• Recommendations include the development of a decentralized database for MSMEs, comprehensive model and tools for Business resilience, awareness building of MSMEs, and support to the MSMEs by the big companies.

• Resilience building starts with the recovery process. • Regulations on business resilience • Resilience benchmark for insurance, financing, tax

benefits and business collaborations. • Building codes to reduce risks. The government

gives refilled lands to MSMEs who are the most vulnerable

• Tax benefit, Disaster proofing loans • How to engage the government ministries and

agencies? • Linkages between multi-stakeholders for business

resilience in MSMEs should be strengthened. • Promote resilience through awards and

recognitions – such as Resilience ratings in Japan • Partnership with the existing networks ARISE, CBI

– OCHA, and UNDP to avoid duplication • Unaffordability of insurance, e.g., earthquake

insurances. Reinsurance premiums are getting high. The group needs to explore alternative strategies.

• Clarify who are MSMEs? In the current framework, there is a “private sector” . However, there is no subgroupings available and very limited information on who is benefiting? There is a lack of having any specific policy on MSME. Within MSME, there are multiple layers and groups from micro/informal through to medium.

• To clarify a strong business case for the private sector to involve in the DRR.

• Tools are available but some awareness raising/sensitization is still needed

• Good entry points have been identified: chambers of commerce, large enterprises, mandated government organizations.

• The first step is a genuine decentralized and localized baseline, and a database of MSMEs is required. The existing databases with the Chambers of Commerce are inadequate do not have resilience. It needs to be combined with the Population census data. Shadow economies exist in the countries. How to create a database is a challenge to be undertaken?

• Tools: Model for Business resilience, tools, and templates should be freely available and supplied by the government and Chambers of Commerce. E.g., FEMA Resilience in Box. Share the tools and templates in the cloud. The model and tools need to include all phases of disasters and resilience. Raise awareness and sensitization is required for the business sector • Big companies with ample money, power, and resources should support the MSMEs to develop their business resilience models as part of their regular responsibilities or CSR. • Resilience is more of a concept, but no actual cases available. Business language and real examples should be shared at the local levels where it has helped the entrepreneurs and industries. • Two critical relations need to be addressed:

a. The critical supply chain needs to be an essential component in companies – both the interests of big and small companies must be explored. E.g. Case study - Food health system – Puerto Rico and US b. Livelihoods and households.

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Annex 2: List of Participants Organization Name Title Email

1 ADPC Ms. Mio Kato iPrepare Business Researcher mio.kato@adpc.net

2 ADPC Mr. Kilian Murphy iPrepare Business Facility Manager kilian.murphy@adpc.net

3 ARISE Japan Mr. Shigeki HONDA Adviser, Minerva Veritas Co., Ltd. s.honda.ms-ad-hd@keio.jp

4 ASEAN Mr. Randy Adrian Officer of Disaster Management and Humanitarian Assistance Division

randy.adrian@asean.org

5 ASEAN Mr. Suryo Ariyanto Nugroho Senior Officer - Enterprise and Stakeholder Engagement suryo.nugroho@asean.org>

6 C3NTRE Mr. Alex Spence Chief Executive Officer alex@c3ntre.com

7 Chulalongkorn University Dr. Natt Leelawat Head of Disaster and Risk Management Information Systems Research Group

Natt.L@chula.ac.th

8 ESBN Mr. Asif Ibrahim Vice Chairman - Newage Group of Industries, Chairman, DCRR Taskforce, ESBN

asif@newage-group.com

9 GIZ Mr. Stephan Huppertz Regional Coordinator Asia stephan.huppertz@giz.de

10 GIZ Ms. Mareike Bentfeld Advisor mareike.bentfeld@giz.de

11 HCL Technology Ltd. Mr. Arunabh Mitra Chief, Continuity Office arunabh.mitra@hcl.com

12 Kyoto University/ ARISE India

Mr. Ranit Chatterjee JST Postdoctoral Fellow/ Member ARISE India ranit13@gmail.com

13 Mitsubishi Corporation Insurance Co., Ltd

Mr. Takahiro Ono Visiting Researcher and Director of Risk Consulting Office, ADRC and Mitsubishi Corporation Insurance Co., Ltd

onotaco@gmail.com

14 Miyamoto International, Inc.

Ms. Elizabeth Petheo Regional Representative & Associate Principal epetheo@miyamotointernational.com

15 Philippine Disaster Resilience Foundation

Ms. Florian Rhiza Nery Business Continuity Program Manager rhizanery@pdrf.org.ph

16 PIPSO Mr. Giffney Dwain Ah Tong Qalovaki

dqalovaki@gmail.com

17 Red Cross Global Disaster Preparedness Center

Ms. Bonnie Elizabeth Haskell Technical Advisor, Preparedness bonnie.haskell@redcross.org

18 The Resilience Advisors (EU) Network

Mr. Marcus C. Oxley Principal Consultant / Managing Director - Resilience Solutions marcus.c.oxley@gmail.com

19 UNDP Ms. Chihiro Bise Programme Analyst chihiro.bise@undp.org

20 UN-HABITAT Mr. Tam Hoang Sustainable Urbanization Specialist tam.hoang@un.org

21 UN-HABITAT Mr. Chanin Homdee Programme Management Intern

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Organization Name Title Email

22 UNDRR Dr. Animesh Kumar Deputy Chief, Regional Office for Asia and the Pacific animesh.kumar@un.org

23 UNDRR Ms. Daniela Gilotta External Relations Officer gilotta@un.org

24 UNDRR Ms. Celine Barmet Associate Programme Officer, Regional Office for Asia and the Pacific

celine.barmet@un.org

25 UNDRR Ms. Iria Touzon Calle Risk Management Officer, Regional Office for Asia and the Pacific

iria.touzoncalle@un.org

26 UNDRR Mr. Omar Hussein Amach External Relations Officer, Regional Office for Asia and the Pacific

omar.amach@un.org

27 UNDRR Mr. Yanick Michaud-Marcotte Disaster Risk Reduction Officer, Regional Office for Asia and the Pacific

yanick.michaudmarcotte@un.org

28 UNDRR Mr. Jung Yeol Kim Technical Expert jung.kim@un.org

29 UNDRR Ms. Malashree Bhargava DRR Expert malashree.bhargava@un.org

30 UNDRR Ms. Rebecca Bonello Intern, Regional Office for Asia and the Pacific rebecca.bonello@un.org

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Annex 3: Concept note and Agenda Background and Context

In most economies, 70-85 percent of overall investment is made by the private sector, including annual

institutional investments worth over USD 80 trillion globally. Within the private sector, the engagement of

micro, small and medium enterprises (MSMEs) in building resilience and climate security is of critical

importance. Globally there are estimated 420 to 510 million MSMEs that account for more than two-thirds

of all jobs and are an essential job creation engine.

MSMEs are also critical for a functioning labour market as they are a key element of stable and prosperous

communities. The International Labour Organization (ILO) highlights that there is a strong relationship

between job dependency and many climate and disaster sensitive sectors where MSMEs are active

participants. MSMEs are considered instrumental to economic growth, innovation, job creation, and social

integration, while also serving as an integral part of global supply chains, both as buyers and suppliers.

Many large global businesses rely on MSMEs as partners and suppliers, which means that supply chain

risk is directly related to the capacity of MSMEs to manage their disaster risks. Given that the most

frequent disaster risks faced by MSMEs are related to utilities such as power, water, transport and

telecommunications; interdependence also exists between disaster risk management in the public sector

and supply chain risk.

As such, MSMEs thereby can and should be a force for resilience building:

• Their own resilience to disaster and climate risks determines the recovery of local and national

markets and the wellbeing of their surrounding communities.

• Given their role as job creators, link to local economies and their contribution to social cohesion,

the resilience of MSMEs has a clear impact on national and local political and social stability.

• In a globalized marketplace and globalized supply chains, MSME resilience is also a critical element

for the stability of global markets and economies, and connecting supply chains.

• The role of MSMEs as innovators and product developers for resilience.

Disaster Risk, Resilience and MSMEs

Compared with global businesses, informal sector producers and MSMEs are far less resilient, particularly

in low and middle-income countries. Smaller businesses are at risk of recurrent localized and extensive

disasters, such as landslides, fires, floods and storms. More likely to be located in hazardous areas, with

evolving extensive risk, these businesses are less likely to have invested in protective risk-reducing

schemes.

Disasters also have crucial consequences on employment. They directly affect the labour market for

businesses, particularly SMEs, as well as for household economies and the macroeconomic environment.

In today’s increasingly interconnected world and cascading risk landscape, the full extent of opportunities

and challenges for enhancing the resilience of MSMEs is still not clear.

Importantly, initial studies highlight that a majority of businesses seem to be unaware of the economic

advantages of long-term resilience building for their businesses, opportunities for business continuity

planning, available financing and capacity building support or tools.

While big enterprises have strong risk assessment, management strategies and mechanisms in place, the

MSMEs are more likely to lack risk awareness and struggle to find the capacity to manage disaster risks,

due to financial, human resource and technical limitations.

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A Case for Business Resilience

The risk of disasters needs to be factored into investment decisions, to enable sustained, resilient growth.

Indeed, if targeted correctly, investments in risk reduction can reward businesses and governments alike

with better financial performance over the long term. There is a gap, however, not just in the understanding

of the quantified benefits of DRR, but also in the incentivisation of resilient investments.

By analysing and valuing risks correctly, businesses can accept and own certain risks, which provide a

competitive advantage; savings from effective risk management can fund other strategic corporate ac-

tivities; and investments in risk reduction may lead to higher returns. Businesses that have invested the

most in risk management may financially outperform their peers.

Most businesses currently address disaster risk through business continuity planning. By offering

immediate and visible benefits, in terms of predictability and reduced losses, business continuity planning

is essential to any corporate risk management strategy. But while essential, it is only a part and not the

whole. Businesses not only need to strengthen their resilience when disasters occur but also measure

how their investment decisions are modifying the levels of disaster risk they face.

The conceptual shift from managing disasters to managing risks will be facilitated in businesses where

risk management is already viewed as an integral part of investment planning and corporate strategy

rather than as a specialised department that helps the business plan and manages contingencies.

Challenges in MSME Business Resilience

The MSMEs face unique challenges owing to their financial, human resource and technical limitations,

compounded when they are positioned in the informal and unorganized sector. Limited documented

information and data is available on the categories and focus/sectors of the MSMEs in a developing

economy. Access to and understanding of disaster and risk data is limited in such circumstances, while

risks have differential impact on different MSMEs.

These limitations have an implication on risk management strategies that such MSMEs can resort to. Risk

transfer and financing options remain a challenge due to unaffordable and inflexible insurance options, as

a result, MSMEs rely on savings and informal financing to recover from disasters.

The Workshop

Recognizing the critical need to enhance business resilience to reduce economic losses and strengthen

overall resilience of the national economies, the UN Office for Disaster Risk Reduction (UNDRR) has

planned to organize a consultation among relevant business networks and technical experts. The

consultation will focus on the resilience building needs of business enterprises, in particular, the MSMEs.

The consultation will provide a platform where network organisations and technical experts in the Asia-

Pacific region can share good practices on how to strengthen business resilience of the MSMEs.

The workshop will build on the work done in the Asia-Pacific region over the past few years to help build

the resilience of MSMEs, in particular through the creation of various Business Continuity Tools. Previous

such workshops organised by UNDRR have confirmed the need for simplified tools in local languages for

small businesses to use.

The consultation will take place at the United Nations Conference Center, Bangkok, Thailand, on the 11

December 2019. It is expected that around 25 participants from the Asia-Pacific region will join the

consultation, including ARISE network representatives, chambers of commerce and industries, academia,

technical community and international organisations.

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Programme

08:30 09:00 Registration

09:00 09:30 Opening Session

• Welcome Remarks and Workshop Objectives

Animesh Kumar, Deputy Chief, UNDRR Asia-Pacific

• Introductions

09:30 11:00 Scene Setting: Business Resilience of the MSMEs

Moderator: Bonnie Haskell, Technical Advisor, Red Cross Global Disaster

Preparedness Center

• Asif Ibrahim, Newage Group of Industries (Chairman, DCRR Taskforce,

ESCAP Sustainable Business Network)

• Arunabh Mitra, HCL Technology Ltd.

• Rhiza Nery, Philippines Disaster Resilience Foundation

• Takahiro Ono, Mitsubishi Corporation Insurance Co., Ltd

Discussion

11:00 11:15 Tea Break

11:15 12:45 Approaches to MSME Resilience

Moderator: Elizabeth Petheo, Regional Representative & Associate Principal,

Miyamoto International, Inc.

• An Area-based Approach to Strengthening Business Resilience: Marcus Oxley, Resilience Advisors Network

• Hotel Resilience: Promoting Private Sector Investments in Climate and

Disaster Risk Management: Mareike Bentfeld, GIZ

• Multi-stakeholder approach and localized solutions for MSME Resilience Mio Kato, Asian Disaster Preparedness Center

• Benchmarking MSMEs in Asia for Strengthening Disaster Resilience: Ranit Chatterjee, Kyoto University, Japan (Business and Biodiversity Group, IUCN)

Discussion

12:45 13:45 Lunch

13:45 15:15 Breakout Group Discussion

1. Addressing data gaps

2. Addressing knowledge gaps

3. Approaches and tools (incl. risk transfer and financing)

What are the pathways to help SMEs build resilience?

15:15 15:30 Tea Break

15:30 16:30 Plenary

Report back from breakout groups

Discussion

16:30 16:45 Conclusion and Way Forward