1967 New York Blackout and the impending federal actions over concern about the reliability of electricity service provision. Other examples are self‐reporting of pollution emissions and green labeling so as to ward off government imposed requirements that would be more stringent. In our case, it pertains to businesses taking into account positive and negative co‐benefits of DRM.

# **7.3. Broader Approaches**

Long‐run considerations have been increasingly incorporated into decision‐making relating to business environmental management decisions now for decades, and more recently have been integrated into sustainable planning. In the US, in more than 300 Standard and Poor’s 500 Stock Exchange Index businesses report their greenhouse gas emissions. The Brazilian firm Natura chooses suppliers on the basis of economic, social and environmental performance. Alcoa bases 20% of its executive compensation to progress on sustainability (Perera et al., 2013). Moreover, NGOs, such as the World Resources Institute, have worked with the private sector to evaluate and improve environmental performance. These initiatives in the environmental area could be extended to DRM, especially in light of recent findings in general and risk management. A survey by EIU (2007) found that protecting and enhancing the firm’s reputation was ranked even higher than preventing financial loss. Still, terrorism and natural weather events ranked 8<sup>th</sup> and 9<sup>th</sup> as the most important external drivers of improvements and risk management in the EIU survey of firms. The study found that the major hindrance to action in DRM was the difficulty in measuring its benefits, a finding that makes improving measurement all the more important in promoting DRM.

Liability considerations in the environmental area already have overlaps with DRM. In 1990, the Chairman and CEO of Bank of America formed an environmental task force in response to increased shareholder interest in such issues. The move was also in response to the fact that, since the 1980s, courts in the U.S. were holding lending institutions liable for contaminated properties. At the same time, the move was viewed as an opportunity to enhance the company’s competitive advantage (Lawrence, 2001).

Another broader perspective is to make disaster resilience, including co‐benefits, an integral part of asset management in business and community operations (MMC, 2015). Of course it takes time to institutionalize such advances but increasing the awareness of DRM co‐benefits can help.

A new “layered” analytical approach to risk framing distinguishes major categories to improve the targeting of DRM. Linerooth‐Bayer and Hochrainer‐Stigler (2015) describe three layers:

1. Frequent but low consequence events.  Here risk reduction is often cost‐effective.

2. Rare but high consequence events. Here risk finance is usually most appropriate.

3. “Beyond adaptation.” This refers to the realization that some risks, especially those associated with the specter of climate change, are so great as to defy risk management from either a technical or economic liability standpoint. Hence, government or donor aid is warranted. There is also the implication that some future disasters may be even beyond these capacities.

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