Helping small businesses become more resilient

Extreme weather and other results of climate change are an increasing risk to businesses everywhere, but to small businesses, they can be devastating. Because small businesses often do not have the time or resources to learn about climate change and how to prepare for extreme weather events, C2ES has prepared a new report that provides recommendations for how state and local governments can help small business owners.

Small businesses make up 99.7 percent of all businesses and account for more than half of sales and jobs in the United States. Their share of the nation’s employment and economy are among several reasons that small businesses are at particular risk to even a single extreme weather event.

Two-thirds of small businesses lack a written disaster recovery plan, which can make it harder for them to quickly restore normal activity after an event. Small businesses are also dispersed, diverse, and have few resources to prepare for and respond to climate risks. Businesses that have no direct experience with weather impacts may also find it hard to see the importance of the issue.

However, it’s not hard to see how one brief event can take a severe toll on small businesses. The July 30, 2016 flash flood that devastated the historic Main Street district in Ellicott City, Maryland, is a prime example. In what the National Weather Service identified as a thousand-year rainfall event, more than six inches of rain fell in two hours. The deluge sent water gushing through an area filled with antique shops, art galleries, boutiques, and restaurants. The flood damaged 90 businesses and caused more than $22 million in damages to infrastructure. Months later, many businesses remain closed.

C2ES conducted research on small business resilience in Maryland, where more than 500,000 small businesses account for more than 97 percent of all the state’s businesses, and employ about half of the state’s private workforce. A C2ES survey found that fewer than half of small businesses in Maryland were aware of their risks and knew where to go for more information. Furthermore, while 98 percent of the businesses surveyed had experienced impacts from extreme-weather events, only 38 percent of them changed their operations or planning in response. Our survey also revealed that most small businesses do not know where to find additional information on climate risks, and that available resources do not directly address local risks that would be most relevant to small business.

In response, C2ES developed a framework that outlines four key recommendations for state and local officials on engaging with small businesses on weather and climate resilience:

1.     Use trusted messengers to convey climate information. These include organizations that small businesses frequently interact with, like city or county chambers of commerce, trade associations and other business organizations.

2.     Leverage existing channels of communication. State agencies and local agencies often already interact with businesses on preparedness, emergency planning, flood management, long-term planning, and economic development. Climate resilience information can be incorporated into these interactions. Likewise, existing resilience efforts can be broadened to include the business community.

3.     Identify new opportunities. New programs and information can be developed on small business resilience, such as public-private partnerships and business resilience networks. Training materials and other resources that are available can be distributed via trusted messengers.

4.     Distribute targeted information. Businesses need more information on what they can realistically do to become more resilient to extreme weather and climate change. Sector- and location-specific information can help businesses better understand their risks and opportunities for enhancing resilience.

Extreme weather and other climate impacts will always be a threat to small businesses and the communities they help support. By developing additional opportunities and channels to communicate with small businesses about those risks, state and local governments can enable more businesses to build resilience now to help better prepare them for the future.