Increasing the Resilience of Japanese Companies to Address Multi-hazard Risks

Abstract

The risk environment surrounding companies has become increasingly complex because of unexpected high-magnitude earthquakes, frequent extreme weather events, adverse effects of climate change, COVID-19, and the impact of the recent Ukraine crisis. Unless companies adequately adapt to the changes in their business environments with their business continuity management (BCM) to address a multi-hazard, they may suffer severe impacts on their business performances and may not survive. Japan is one of the most natural hazard-prone countries with the most corporate assets in the world. However, it currently has various challenges in developing and implementing BCM. This study provides a method to increase the business resilience of Japanese companies for effective management of current and future risks against multi-hazards. This study reviews the hazards faced by Japanese companies and their effects. The recent progress of and challenges to BCM and the related policies in Japan are assessed because a more effective BCM can form the foundation for increasing business resilience. Moreover, this study considers how business resilience can be increased to tackle current and future multi-hazards. The results show that the Japanese companies’ BC plan (BCP) currently tends to focus on single or some particular hazards considering less on fund procurement. Thus, more comprehensive approaches to address unexpected consequences regardless of the hazard type should be highly promoted in the political and practical aspects, and financial strategies should be more mainstreamed on BCM because these improvements will lead to increased business resilience and corporate value.