{ "docId": "019dd923-5ca1-7489-b639-a22e527929b1", "docSlug": "94459f2263408b95", "documentTitle": "From Threats to Impact Asia-Pacific", "authorId": "OliverWyman", "authorName": "Marsh & McLennan Companies", "documentKindSlug": "consulting-deck", "documentKindLabel": "Consulting deck", "sourceTypeSlug": "strategy_consulting", "sourceTypeLabel": "Strategy consulting", "presentationDate": null, "orientation": "portrait", "aspectRatio": 0.707, "pageNumber": 29, "pageCount": 59, "prevPage": 28, "nextPage": 30, "slideType": "other", "function": "summarize", "density": "overcrowded", "nDataPoints": 2, "notes": "The page contains two columns of text with numbered section '2. Bolstering Operational Resilience'.", "elementsJson": [ "paragraph", "footnote" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-5ca1-7489-b639-a22e527929b1/29", "deckHref": "/decks/019dd923-5ca1-7489-b639-a22e527929b1", "deckJsonHref": "/decks/019dd923-5ca1-7489-b639-a22e527929b1.json", "deckAnchorHref": "/decks/019dd923-5ca1-7489-b639-a22e527929b1#slide-29", "components": [ { "bbox": { "h": 0.01, "w": 0.2, "x": 0.14, "y": 0.94 }, "kind": "disclaimer", "text": "Copyright © 2018 Marsh & McLennan Companies", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "284ec1c7-8014-493b-a55e-059a649d715a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.35, "x": 0.14, "y": 0.07 }, "kind": "paragraph", "text": "In general, one of the key criteria for consideration from a private business and investor perspective when entering this space is whether projects are bankable. APRC's recent report on closing the financing gap for infrastructure projects in Asia-Pacific identified six levers for project bankability (Exhibit 14).", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "20fcb9d0-3e24-4525-8cb8-1eadb6ea91ce", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.35, "x": 0.51, "y": 0.07 }, "kind": "paragraph", "text": "In this case, companies located in urban areas with poor drainage and sanitation may suffer the same substantial damages as those with operations located on low-lying flood plains. Solely focusing on the direct damage to companies' properties from weather events and cyber incidents can lead to second order damage due to infrastructure failure being overlooked and total damage being underestimated.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3e60186c-7e34-454f-90a4-43a7582d7ed1", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.35, "x": 0.51, "y": 0.43 }, "kind": "paragraph", "text": "In practice, some companies have been investing in off-grid distributed energy systems, using renewable energy to bolster operational resilience in the face of frequent outages. Major airports have been among the leaders in implementing this solution in India. For instance, in 2016, Delhi International Airport announced a plan to expand its solar power capacity from 7.8 MW to 20 MW by 2020 to reduce the electricity it draws from the grid. Elsewhere, Cochin International Airport has already achieved self-sufficiency on solar power since 2015. These successful cases provide a viable model for businesses in India and across the region.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "4c2d58b7-eeec-4efb-8b51-a3abdc50fc6c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.35, "x": 0.14, "y": 0.67 }, "kind": "paragraph", "text": "For example, even when a company's production lines are not affected by a climate event (such as a flood), the supply chain may still be disrupted from transport infrastructure being damaged or rendered unusable.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7153932d-a82f-47c9-95b5-fd129fea389d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.35, "x": 0.14, "y": 0.19 }, "kind": "paragraph", "text": "Efforts to institutionalize these levers in Asia-Pacific are still relatively nascent. For example, findings from the World Bank's PPP Benchmark report showed that while South Asian countries are at par with the global average, countries in East Asia and the Pacific have largely fallen short in PPP preparation and procurement processes.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "72b0944b-95e7-4d6b-ad88-c52f2e909920", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.35, "x": 0.51, "y": 0.3 }, "kind": "paragraph", "text": "An example of this latter approach is the shift from \"consumers\" to \"prosumers\" of energy. In this arrangement, organizations take an active part in the production, consumption, and management of energy (Exhibit 15). Prosumer-driven organizations also go beyond ensuring redundancy and resilience and aim to harness new technology and analytics to more efficiently use energy, saving substantial operational costs in the process.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9f9e35b7-e180-40eb-bafc-dca91d542306", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.35, "x": 0.51, "y": 0.66 }, "kind": "paragraph", "text": "Finally, an important consideration for companies is to insure against loss associated with critical infrastructure failure or shortfall. For example,", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "b2c389e2-6384-40a8-a5b9-d52f6f73a664", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.16, "w": 0.35, "x": 0.14, "y": 0.51 }, "kind": "paragraph", "text": "It is important that companies evaluate the role of critical infrastructure failure or shortfall in relation to climate change events as well as cyber-attacks. These events not only directly impact company facilities and operations which the company has control over, they can also lead to the breakdown of critical infrastructure such as outages and damaged bridges that are not under the companies' purview, but nevertheless have an impact on its operations.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c1569977-abbe-4084-a4b6-06fd40d493c5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.16, "w": 0.35, "x": 0.14, "y": 0.31 }, "kind": "paragraph", "text": "Despite the fact that risks are inevitable, businesses looking to enter this space will be supported by governments' continued efforts to improve institutional frameworks as well as incentives provided for PPP projects. These opportunities are also extended to other industries that are not directly tied to infrastructure development. For example, investment in infrastructure can be a stable source of cash yield for financial institutions such as commercial banks, insurance companies and investment funds.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d9d0b7aa-692d-46cd-8650-56f30c67c87f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.09, "w": 0.35, "x": 0.51, "y": 0.2 }, "kind": "paragraph", "text": "Addressing the problem of critical infrastructure failure or shortfall with a mind for climate change and cyber-attacks may require companies to rethink the organization as a whole. Possible solutions such as operational reengineering, or the establishment of spare capacity/backup production capabilities can also be considered as longer-term strategic responses.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "dfbbc380-ada3-48c6-9b67-711247db442c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.35, "x": 0.14, "y": 0.73 }, "kind": "paragraph", "text": "Where critical infrastructure is not built to be resilient against such threats, damages to businesses can be greatly exacerbated. For instance, the lack of investment and planning in urban infrastructure has greatly amplified the risk and damage of floods in cities in India.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f18f45d8-6ce0-423a-80b9-bc4038e2fef0", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.35, "x": 0.14, "y": 0.48 }, "kind": "title", "text": "2. Bolstering Operational Resilience", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "582bae48-0a84-408a-86c4-7bfb99dfb0ce", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Problem-Agitate-Solve (PAS)", "slug": "problem-agitate-solve-pas", "agent": "Storyteller", "layer": "slide", "matchId": "021d9ff2-ff88-4a81-8574-bef62de20e15", "evidence": "Addressing the problem of critical infrastructure failure or shortfall with a mind for climate change and cyber-attacks may require companies to rethink the organization as a whole.", "confidence": 0.7 } ], "frameworks": [], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }