Linnea Texin

Business Lessons from the Hurricane

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Linnea Texin
6th November, 2012, 2:50 pm

It is time to advance the climate change discussion from a debate about the existence of global warming to a conversation about how to address its potential impact.  Both large and small companies need to have robust contingency plans and risk mitigation strategies in place given the significant damages that natural disasters can cause to businesses’ bottom lines and reputation.  For example, according to the New York Times, the recent Hurricane Sandy caused an estimated $20 billion in lost economic activity.

Businesses should take note of the lessons learned from prior natural disasters.  As a New Yorker, it has been educational to watch how different companies responded to Hurricane Sandy.  Health clubs, such as Equinox and New York Sports Club, have been lauded for opening their facilities to community members for free, providing hurricane survivors with critical access to hot showers and electrical outlets. Their actions have helped foster goodwill and a reputation as contributors to the local community.

On the other hand, some retailers have been criticized for their insensitivity to the storm’s widespread devastation. American Apparel was chastised for trying to increase revenues in the affected region through a “Hurricane Sandy sale.”  Similarly, Urban Outfitters offered free shipping to shoppers who used the code “ALL SOGGY” at checkout.

In addition to marketing approaches, the treatment of employees has also been a consistent theme in the lead-up and aftermath of the storm.  Some companies, such as Equinox referenced above, have been criticized for requiring their employees to work amidst safety concerns and negligible transportation options.

Overall, the storm’s widespread impact has helped foster a healthy conversation on how businesses should respond to natural disasters and this discussion needs to be continued into the future.  Regardless of whether Hurricane Sandy was the direct result of climate change or not, her impact has shed light on the need for companies to develop comprehensive disaster relief strategies with consideration for all components of the value chain.


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