Japanese businesses are taking steps to deal with intensifying floods in the country, but few are taking steps to fortify facilities, instead relying on insurance and alternative supply chains, a study found.
A monthly corporate survey by Reuters found that 77% of companies in Japan have business continuity plans for disasters, but only 45% of respondent firms have taken measures to safeguard their facilities from flooding. Around 80% have bought insurance, while around three-fourths have diversified their supply chains, the study showed.
The survey, conducted from late-December 2019 to early January, polled 502 large and medium non-financial companies.
While Japanese organisations are adequately prepared for earthquakes, many are not well-equipped to deal with flooding, which has become more common in recent years due to climate change. Japan has experienced flooding that has been described as the worst in decades, and 2019 will likely be the fifth-straight year of increasing losses due to flooding.
The country’s economic policymakers are worried that a delayed recovery from supply-chain disruptions caused by typhoons and floods will drastically weigh down on the export-reliant economy, which is already dealing with a global slowing in growth.
The ruling Liberal Democratic Party has urged for the creation of a new government ministry in charge of disaster prevention and recovery. The government has also set aside ¥7 trillion (US$63.7 billion) over the next three years to finance infrastructure that boosts disaster resilience.