The alarming rise in heat-related mortality due to climate change
A recent research article1 in Nature Communications has captured my attention lately and if you’re at the helm of a Small to Medium-Sized Enterprise (SME), it should certainly pique your interest as well. This important study illuminates a pressing concern: the alarming rise in heat-related mortality connected to climate change. While it may appear unrelated to Small and Medium-sized Enterprises (SMEs), the profound implications extend their reach into every corner of the business world. As such, mitigating climate-related risks has become an imperative for SMEs around the world.
Have extreme weather events increased due to climate change?
At its core, this research delves into the repercussions of surging global temperatures on heat-related mortality. The study’s findings resonate deeply with businesses worldwide. Here’s a succinct overview:
1. Escalating Frequency of Extreme Heat: The research underscores the unsettling reality of increasingly frequent, extreme summer seasons with severe health impacts. Events that were once considered 1-in-100 year occurrences in the year 2000 may now strike every 10 to 20 years in the climate of 2020.
2. Projected Future Scenarios: The study paints a stark picture under scenarios of 1.5°C and 2°C warming, where heat-related mortality extremes could become routine without substantial adaptation efforts.
Implications of higher temperatures for SMEs
So, what does this research signify for Canadian SMEs and businesses globally, and why should they heed the warning?
1. Risk Identification: SMEs must recognize that climate-related risks are no longer abstract threats. Extreme heat events have the potential to disrupt operations, wreak havoc on infrastructure, and engender health issues among employees, thereby jeopardizing productivity.
2. Supply Chain Resilience: Climate change’s disruptive force can ripple through supply chains, risking access to critical resources and materials. SMEs should embark on diversifying suppliers and fortifying their resilience.
3. Heightened Insurance Costs: The mounting climate risks may lead to elevated insurance premiums. SMEs must factor in these increased costs when crafting their budgets.
4. Consumer Preferences: With mounting climate consciousness, consumers are gravitating toward environmentally conscious businesses. SMEs that adopt sustainable practices can gain a competitive edge in this shifting landscape.
5. Regulatory Pressures: Governments are intensifying environmental regulations. SMEs must remain well-informed and nimble, adapting to stay in compliance with these evolving standards.
Impacts of Higher Temperatures Across Different Sectors and Industries
The escalating temperatures globally hold sector-specific consequences that merit careful consideration. Various industries and sectors face unique vulnerabilities to the evolving climate, necessitating a comprehensive understanding of these implications to inform proactive decision-making.
1. Agriculture and Food Security: Soaring temperatures can lead to diminished crop yields, disrupted growing seasons, and heightened susceptibility to pests and diseases. Agricultural practices must adapt, embracing heat-tolerant crop varieties and innovative water management to safeguard food security.
2. Energy Production: The escalating heat can exert immense pressure on energy infrastructure, particularly in regions dependent on cooling systems. Heat-related disruptions can ripple through energy generation and transmission, translating into power shortages and escalated energy costs.
3. Healthcare: The healthcare sector faces substantial challenges in managing heat-related illnesses and crises. Hospitals and healthcare facilities must bolster their readiness to accommodate a surge in patients during extreme heat events.
4. Urban Planning and Infrastructure: Escalating temperatures exacerbate urban heat islands, escalating health risks and discomfort in urban environments. Urban planners must prioritize heat-resilient infrastructure, embracing green spaces and cool roofs to mitigate these effects.
5. Tourism and Hospitality: Warmer temperatures can sway tourism dynamics, rendering certain destinations less appealing due to extreme heat while boosting tourism in cooler locales. This dual challenge mandates adaptation strategies.
6. Water Resources: Soaring temperatures can exacerbate water scarcity, intensifying evaporation rates and altering precipitation patterns. Water-dependent industries such as manufacturing and agriculture may encounter challenging conditions.
7. Transportation: Rising temperatures can exert an impact on transportation systems, including public transit, which could lead to lead to reduced ridership and service disruptions. Rising temperatures can affect water levels and sea routes, impacting shipping operations.
8. Insurance and Financial Services: The insurance sector may witness a surge in claims tied to heat damage, necessitating recalibrated risk assessment and pricing.
9. Construction and Real Estate: Building materials and designs may need to evolve to endure higher temperatures and offer superior energy efficiency. Property values in vulnerable areas could see fluctuations, impacting real estate markets.
10. Institutional Investors: For institutional investors, asset owners, and managers, comprehending sector-specific climate risks and opportunities within their portfolios is paramount. Companies that proactively address climate-related challenges may present attractive investment prospects, while those ill-prepared for climate change may face heightened financial risks.
11. Banks and non-bank lenders: Lenders must evaluate the climate risks associated with their loan portfolios. As extreme weather events become more frequent, borrowers may face difficulties in repaying loans due to property damage or business interruptions. A thorough risk assessment can help financial institutions anticipate and manage potential loan defaults.
In conclusion, the repercussions of surging temperatures are manifold, permeating nearly every facet of the global economy. Addressing these challenges hinges on a concerted effort, combining mitigation and adaptation strategies while taking into account each sector’s distinctive requirements. Companies that prioritize climate resilience and sustainability assume a pivotal role in forging a more robust and sustainable global economy and as such, will harvest new opportunities from the changing landscape.
How to mitigate climate-related risks for your SME?
The compelling urgency of implementing mitigation and adaptation measures spotlighted in this research serves as a call for SMEs. To navigate these tumultuous waters, SMEs can take the following actions:
1. Vulnerability Assessment: Initiate a comprehensive climate risk assessment to discern how your enterprise might be impacted.
2. Adoption of Climate-Resilient Practices: Invest in sustainable practices, energy efficiency measures, and disaster preparedness to bolster your resilience.
3. Embrace the ESG Agenda: Align your business with Environmental, Social, and Governance (ESG) principles to attract responsible investors and access a burgeoning pool of capital.
4. Collaboration and Advocacy: SMEs can join forces, advocating for policies fostering climate action at the local, provincial, and national levels.
5. Adopt principles of the l'économie circulaire : Principles of the circular economy represent a futuristic and promising approach to building resilience in your company and in society as well.
How can Facultas-Risk Consulting Inc. help?
Would you like to plan for and mitigate the effects of climate risk on your business? At Facultas-Risques Services Conseils Inc., we stand ready to support SMEs in fortifying their risk management practices, particularly for emerging risks like climate risk. Stay tuned for forthcoming insights on how to adeptly navigate and mitigate climate risks, ensuring your business seizes opportunities along the way!
- Lüthi, S., Fairless, C., Fischer, E.M. et al. Rapid increase in the risk of heat-related mortality. Nature Communications 14, 4894 (2023). https://doi.org/10.1038/s41467-023-40599-x ↩︎
