While natural disasters like hurricanes, tornadoes, and floods tend to get most media coverage, it’s heat that’s the real killer. So far this summer, more than 840 people have died from heat (hyperthermia) in the U.S. and Canada alone.
In 1988, when the changing climate was referred to as global warming, it seemed obvious that the main issue with a changing climate was that the planet was getting hotter. Maybe to some people, depending on where they lived, this seemed like welcome news with longer summers and shorter winters. But this isn’t the real story of a warming planet.
With scorching temperatures hitting the U.S. and Canadian northwest, mega drought in the U.S. southwest, extreme rainfall and flash floods causing widespread damage to towns in Western Europe, and wildfires burning in typically cold places like Alaska and Siberia, there can be no doubt that a hotter planet can have devasting effects on people and communities.
But what does this mean for businesses? Will a hotter climate affect the bottom line? The short answer is yes.
The Cost of a Hotter Planet
Time reported that the consequences of extreme heat could “knock $170 billion off the country’s GDP by 2100, according to the U.S. Environmental Protection Agency.” The losses will especially be felt in the southern states from California to Florida according to a study published in Climatic Change.
Too Hot to Work
One impact of extreme heat waves will be the loss of productivity. According to the same study in Climatic Change, “up to 1.8 billion workforce hours, or about 11 working hours per U.S. worker, could be lost annually over the next three decades due to extreme heat caused by climate change.”
For businesses that mainly operate outdoors, they are already feeling the immediate effect. In industries like agriculture, fishing, transportation logistics, and construction, workers must work outside and generally have little protection against high temperatures. A myriad of small businesses like restaurants and food trucks are also negatively affected. Some days will be just too hot to work and pose a danger to employees requiring businesses to close during times of extreme heat. According to the U.S. Bureau of Labor Statistics, 15 million workers have jobs that require them to be outside and only three states (California, Minnesota, and Washington) have regulations to protect workers from extreme heat.
Heat Impact on Infrastructure
For most other businesses with workers who mainly work from air-conditioned buildings (or from home), the effects will nonetheless be significant. Not only does productivity decline as temperatures rise, but extreme heat can affect infrastructure. This summer has already witnessed heat impacts on transportation like roads buckling, rail lines expanding, and delaying aircraft from taking off.
More worryingly is that extreme heat is putting a strain on power grids from increased air conditioning use. In California, utilities will need to have rolling blackouts to save energy while at the same time making homes and businesses hotter. The 2021 extreme drought is adding stress to an already overworked electrical grid because a hydroelectric power station is on the brink of turning off because water levels are so low.
Higher temperatures can also make extreme rain events more likely. Flooding of homes, businesses, and infrastructure like airports, ports, and subways, during heavy rainstorms would have a negative effect on companies’ abilities to operate.
Higher temperatures also fuel droughts causing snow pack melt, more moisture to evaporate from lakes, reservoirs, and soil, and drier shrubs and trees. Companies that rely on water for food production, packaging, and other manufacturing processes are also at risk as well as the companies they supply.
With the megadrought affecting the U.S. southwest, photos of farmers in California pulling up water-intensive crops like almond trees circulated as they faced a decrease in water supply. A reduction in farming and farm income will have a knock-on effect on the industries that support farming e.g., equipment manufacturers, and eventually lead to higher food prices for consumers.
With the U.S. wildfire season starting early and fueled by the drought and high temperatures, businesses can be affected in several ways. Direct impacts to property, equipment, and people can have a devastating impact on businesses. After a fire, employees may move away from the area, schools and hospitals may close, roads may be damaged or closed, and utilities like electricity, water and sewer may take months to be repaired. Businesses may move operations or decide to close altogether.
What can Businesses Do?
1. Decarbonize. From choosing clean energy to choosing green suppliers, it’s time to decarbonize every facet of a company’s operations, buildings, and transportation including examining supply chains. The only way to slow down a warming planet is to stop adding pollution to the atmosphere.
2. Adapt. Businesses need an emergency plan that takes into account extreme weather events but also plans for impacts to infrastructure like rolling blackouts. How will businesses operate without electricity? What alternatives can businesses invest in to make them more resilient?
3. Plant trees. If you can’t plant them yourself, pay others to plant trees for you through carbon offsets or donating to organizations planting trees. The Amazon rainforest is now creating more CO2 than it is absorbing so there is no doubt, the world needs more trees. It is also an equity issue as many cities (where many employees live and businesses operate) have areas with no shade which disproportionately affect communities of color.
4. Lobby governments on behalf of climate change. Many companies pledge to reduce carbon emissions while actively lobbying governments against regulating pollution like improving car emissions standards or reducing methane leaks. How many companies are actively lobbying for increasing environmental regulations? How about lobbying for government investments in green technologies and improving infrastructure? Companies outspent environmental interest groups 10:1 on lobbying between 2000-2016.
The Bottom Line
As the summer of 2021 has already shown, there is no escape from climate change. It is not only a problem affecting the developing world, it is affecting U.S. businesses and the communities they operate in, right now.
To help your business adapt to our warming planet, contact SSC for a free consultation. We can help your business become more resilient to extreme heat while reducing your carbon footprint.