Heat is a growing threat to your business. Here’s what to look out for.

Between hurricanes, droughts, floods, and other calamities, climate change is a multipronged risk for business leaders. Now, it’s time to think about the risks of raw heat.  

Barely a week goes by without a record heatwave somewhere in the world. According to the World Economic Forum, mounting heat can result in economic losses of $1.7 to 3.1 trillion per year. It’s well past time to take heat very seriously as a business risk.

Here are the 8 hottest issues:   

1. Increased operational costs 
   Higher temperatures lead to increased energy consumption for cooling. This drives up costs, impacts profitability and strains financial resources, especially for energy-intensive industries. 
2. Supply chain disruptions 
   Excess heat can affect transportation infrastructure like roads, railways, and shipping routes. It can also impact production and raw material availability, leading to delays and increased costs. 
3. Workforce productivity decline
   High temperatures can reduce productivity and increase absenteeism due to heat-related illnesses. This leads to higher healthcare expenses, legal liabilities, and decreased morale. 
4. Damage to physical assets 
   Excessive heat can cause damage to infrastructure and equipment. Buildings, machinery, and technology systems may need more frequent replacements or upgrades.
5. Impacts on agricultural output and the food supply 
   For businesses dependent on agricultural products, excess heat can negatively affect crop yields and livestock health, leading to increased costs and potential shortages in supply.
6. Insurance and liability costs 
   Increased heat risk can lead to higher insurance premiums and greater liability exposures. Businesses may face higher premiums and financial losses from underinsured events.
7. Regulatory and compliance challenges 
   Businesses may face stricter regulations related to emissions and energy usage. Adapting to new regulations can be costly and time-consuming, potentially affecting competitiveness. 
8. Reputational risk and brand damage
   Businesses may face public scrutiny and reputational damage if they are perceived as not doing enough to mitigate climate change. This can affect customer loyalty and investor confidence. 

Bottom line: heat-related risks are real and growing fast. It’s time to get serious about mitigation. No company can stop mounting heat by itself, but working with the Global Heat Reduction Initiative, corporations and governments can target and slash emissions of climate super pollutants like methane, black carbon, and HFCs that cause roughly half of all warming and can be 1,000s of times stronger than carbon dioxide. 

Here's how:

• Registry: Support powerful near-term heat mitigation projects and purchase credits that reduce super pollutants and CO2 on your path to net zero.  
• Footprinting: Learn your operations’ heat impact with the most comprehensive climate footprint available and make smarter, more cost-effective decisions to reduce it.
• Advisory: Work with us to develop heat impact assessments for new and existing projects and facilities, optimize your climate investments, and integrate near-term heat reduction into your climate strategy.  

Contact us to learn how we can support your business.