The hidden costs of extreme weather

As extreme weather events intensify across the world, organisations face mounting risks to both operations and their workforces. The International SOS Foundation has released research into this pressing issue, revealing key insights into the business disruptions and health challenges posed by extreme weather.

Key findings include:

• Widespread impact: 65% of respondents reported their organisation had been affected by extreme weather in the past five years
• Mental health gaps: 40% of organisations fail to provide mental health support for employees and their families impacted by extreme weather events
• Top threats: flooding emerged as the most common issue, with heavy rain being the primary cause, for over 72% of respondents
• Disruption levels: among those significantly affected, 80% reported operational disruptions, 54% experienced infrastructure damage, and nearly a quarter saw physical injuries among employees or their families
• Lack of preparedness: 36% of organisations lack comprehensive plans and policies for extreme weather events, while 57% haven’t conducted risk assessments on such threats.

These findings highlight how extreme weather events are already impacting organisations in profound ways, disrupting operations, damaging infrastructure, and putting employee wellbeing at risk. Yet many organisations remain unprepared for the growing frequency and severity of these events. One critical area of concern is the failure to address the health risks associated with extreme weather.

For organisations with plans in place, only a quarter specifically address the health risks to employees, leaving many unprepared to manage injury, illness, or fatalities during an event. With over a quarter of organisations reporting that they would be unable to locate employees during a crisis, emergency response and effective crisis management are further complicated. This poses a significant risk to both employee safety and organisational continuity.

Moreover, the mental health impact of extreme weather events is often overlooked. After such incidents, many employees are left to cope with trauma, stress, and anxiety, yet 40% of organisations do not offer any mental health support to affected employees and their families. The aftermath of these events can be just as devastating as the physical damage, and without the right support, the long-term consequences can be significant for both individuals and the organisation.

Dr Irene Lai, Global Medical Director at International SOS, stressed the importance of addressing these health and wellbeing risks in a comprehensive approach: “In today’s world, businesses are navigating increasingly complex challenges due to extreme weather. It’s not just about bracing for a flood or a heatwave; it is about the human side of resilience – understanding how these events can profoundly impact health, mental wellbeing, and security.”

S&P Global Market Intelligence recently released a report exploring how climate change and extreme weather are reshaping the insurance industry.