Business Impacts Due to Extreme Weather Change

            Extreme weathers are becoming more common around the world, leading to supply chain disruption, product loss, employment interruption and business disruption. According to the National Oceanic and Atmospheric Administration (NOAA), natural disasters related events in the US have led to costs of over $91 billion in 2018 alone. These disruptions have led to a record of 420 investors in control of $32 trillion in assets to ask world governments to take action towards the Paris Agreement and climate related issues. This article will look at the actions companies can take to minimize the impact extreme weather can have in their business and steps that can be taken to build organizational resilience and good rapport with the community, driving a unique competitive advantage.


Work-from-Home (WFH) Policies

            Depending on the nature of the work, certain employees are required to be on site and other are not. Jobs that require employees to be on premise should consider ways to facilitate the employee’s ability to work and their basic necessities. Here are a few things to consider:

  • Should the employee require to operate out in the weather, ensure that the employee has food and shelter within proximity, allowing the employee to work without unnecessary delays.
  • Shuttle service for employees – May be best for heat related extreme weathers.
  • Move face-to-face meeting to virtual meetings – Great solution for both extreme heat and cold weather .
  • Set-up cloud back-up server for infrastructure related assets and make sure your employees’ systems are properly up to date so no one is caught by surprise when they need to work from home.

            Companies should set-up WFH guidelines for employees that are non-essential on premise. Businesses should look at guidelines such as the one offered by USC.Edu and proactively consider offering WFH days for eligible employees.

Quality Control & Productivity under WFH

            Managers should always look to set-up tasks that are SMART: specific, measurable, assignable, relevant & time-based. That can be even more important under work-from-home, where questions may exist about team productivity. For those that have received the trust of their supervisors, continuous business tasks should remain and positive effort to keep supervisors and colleagues appraised of your work should be done.

Provide a Support System to Employees             

            When a natural disaster impacts an employee’s personal life, companies should look to provide base support, whether that is in the form providing time in lieu, allow employees to work from home, set up an official and unofficial channel to provide employees with assistance support.

            Companies will need to be pragmatic in their approach to extreme weather and that pragmatism will increase employee satisfaction and retention as individuals may see that the company is understanding and supportive of employees during difficult times.


Provide a Support System to Clients and Community

            When extreme weather hits a community, it can have a long-lasting effect on their economy. As a company, being able to provide support to clients and the communities they live in at their time of need allows you to gain a positive business rapport that can last a life-time. This support can also alleviate their economic costs, allowing companies and the community to get back on their feet faster, which in turn leads to business-as-usual at a faster pace. Some examples of the support system a company can provide are monetary support, logistical support, and pro-bono consulting.


            Weather pattern variability can have a direct impact on the demand and supply of products that are required for the business to run. Agricultural products are a great example, with a variety of major researches done that shed light on its impact globally. To limit weather-related exposure, organizations should look to understand how the weather may impact their major suppliers and customer patterns to determine whether there are contingency plans such as the purchase of futures contracts, variability in material needs (e.g. use of different material for production in case a key ingredient suffers a spike in price), etc. There are cases where weather-related risks simply have to be accepted as part of running the business, but it is preferable to know of the potential exposure in advance than to be caught off-guard.


            Changes to weather pattern were estimated to cost close to 3.4% of the U.S GDP in 2008, roughly $485 billion. Under 2019’s GDP of $21.73 trillion, weather variability would cost around $739 billion, without accounting for the continuous increase in erratic weather, which should lead to higher costs.

            Assessing, minimizing and mitigating risks to an organization’s property is essential for its continuity and success. This process starts before the purchase of said property, by defining the costs associated with the different purchasing options which includes weather related concerns. It then involves creating the right processes to avoid, transfer, mitigate or accept the weather-related risks. These may include water-proofing critical items, purchasing weather-related insurance and many more. Organizations should aim to have an annual risk assessment that includes weather-related exposure (sometimes more depending on organizational needs).

Leadership Support

            Companies will need management support for policies of natural disasters and work-from-home and they will need to provide the appropriate support, whether that is to send a company-wide message to folks from a certain region, letting them know that if the weather is extreme in the upcoming day, that they should work from home or to emphasize that employees are trusted to make the right decision based on company’s base policies.

            Pragmatism will be essential for the long-term success of companies under these new climate related risks. Businesses able to find and successfully implement solutions to balance climate related risks will be able to weather the storm and come out ahead of less equipped competitors. Resilience and pragmatism will be essential in today’s technologically driven society, climate change led natural disasters will make it mandatory.

            Further, it is important to note that in large businesses that are geographically spread, weather situation may vary, therefore there should be a level of discretion of the leaders responsible for a determined geographical location to allow for such measures to take place or not.

Natural Disasters, COVID-19 and Societal Resilience

            There are unique sets of challenges that occur when a natural disaster hits while another crisis is happening, such as COVID-19. It can at times create a perfect storm that spirals communities out of stability, comfort and quality of life. To be better positioned for a potential crisis of this nature, GPetrium has written an article called ‘Resilient Societies in Light of COVID-19 and Natural Disasters’.

RASCI Template

RASCI Template Share on facebook Share on twitter Share on linkedin Share on email Share on whatsapp                The RASCI matrix is a visual business tool used to define the…

Communication Plan Template

Communication Plan Template Share on facebook Share on twitter Share on linkedin Share on email Share on whatsapp                Communication helps instill important information between different parties, helping to build…

Team Charter Template

Team Charter Template Share on facebook Share on twitter Share on linkedin Share on email Share on whatsapp                Team charters can help teams, projects and organizations build the rules…
Receive a monthly newsletter with updates, insights and solutions from GPetrium!