Eight business continuity and operational resilience risks to watch in 2023
- Published: Monday, 09 January 2023 09:59
Increased geopolitical tensions, cyberattacks, supply-chain issues, and continued pandemic-related fallout prompted a growing number of organizations to take a decidedly more strategic approach to business continuity and operational resilience in 2022. Many of these issues are spilling over into 2023 – and new risks are on the horizon.
Here, Brian Zawada FBCI highlights eight threats to watch as part of your business continuity and operational resilience program:
In 2021, goods were stuck on cargo ships. In 2022, energy costs skyrocketed. The energy crisis that arose from Russia’s invasion of Ukraine is a good reminder of the ongoing role fossil fuels play in the modern world. Cost and scarcity of energy continues to affect extended supply chains globally. How might energy shortages impact your suppliers, your customers, and your operations?
Bankruptcy, or even access to capital, has not been a pervasive concern for more than a decade. Rising interest rates, shaky crypto, and a tight labor market have all contributed to today’s uncertain economy. Companies that are not well capitalized could be in a precarious position if conditions worsen. Funding growth may be especially challenging. Do you have the resources to weather a financial storm – especially if that is compounded by other watchlist items?
Cyber threats are relentless with no signs of slowing. Phishing attacks, ransomware, and data breaches are all on the rise. Complicating matters, many of the activities are government sponsored, which makes them especially tricky to combat. Are your cyber defenses as strong as possible, and is your cyber response well-rehearsed?
Employees, investors, customers, regulators, and other stakeholders are increasingly holding companies accountable for their environmental, social, and governance practices, like those relating to climate change and social equality. For example, The European Union (EU) recently announced an agreement to impose a carbon-dioxide emissions tariff on carbon-intensive imports, which will impact manufacturers worldwide. If you aren’t prioritizing what your stakeholders care about , you will be penalized – and the result could be significant financial or reputational damage. Do you have a credible ESG program in place – and can you report on your progress with the transparency and accountability that stakeholders demand?
The Great Resignation, quiet quitting, the retirement of older workers – coupled with a tight labor market – is leaving organizations with significant gaps in knowledge and stretched resources. Staffing issues rob you of the bandwidth to respond, which gives you less room to maneuver in rough conditions. Do you have the talent, capacity, and best-in-case knowledge to take on today’s business challenges?
Extreme weather events
Hurricanes, wildfires, tornadoes, and extreme temperatures are all happening with greater frequency, causing ever-greater damaging impacts. The resulting exposures are far reaching, spanning everything from property insurance to employee safety and supply-chain disruption. Do you have emergency contingency plans in place to deal with environmental challenges – and have you exercised them to make sure they hold up?
Managing risk is essential for the success of every project – whether it’s a self-performed office building or a decade-long rail project with hundreds of subcontractors. Many project management teams are already stretched very thinly – and an Excel spreadsheet simply isn’t enough to stay on top of threats coming from all directions. Do you have what it takes to get in front of risks that could derail your projects?
Expanding regulatory activity continues. Several new laws are coming into play in 2023 – with more to come. Climate disclosures, human rights protections, ESG mandates, and operational resilience requirements are all top on the agendas of regulators around the world. Large companies are the first impacted, but many mandates trickle down to smaller companies over time. Do you have the systems and processes in place to efficiently manage compliance without risking expensive fines or penalties?
Kick off the new year by taking stock of where you are now to best prepare for what could be headed your way. How would these threats impact your operations and business objectives? Resilience is not a once-and-done exercise. Continue to monitor the horizon throughout the year to ensure your organization is truly ready.
Brian Zawada FBCI is VP of Strategy - Business Continuity & Resilience at Riskonnect.