Discover How Businesses Are Affected by Weather Risks

Explore how the continuity of processes in businesses is affected by weather risks and discover solutions from Buluttan Weather Intelligence.

wind farm landscape

Businesses at Risk from Weather Events

From logistics to the energy sector, many businesses must incorporate weather risks into their decision-making processes.

The agriculture and horticulture sectors, for example, may face risks to harvest productivity and product quality due to severe rainfall or drought.

The construction and building industry, while dealing with weather events like storms or heavy snowfall, may jeopardize project timelines and safety.

The transportation and logistics sector may experience disruptions in transport routes and delays in delivery processes due to snowfalls or severe winds.

The tourism and entertainment sector may have to disrupt holiday plans due to unexpected weather changes and cancel outdoor events.

The energy production sector may face risks where weather conditions, such as low wind speeds for wind energy or cloudy days for solar energy, can impact energy production.

The healthcare services sector may also have to cope with increases in emergency room visits and health issues due to temperature fluctuations or air pollution.

Therefore, businesses often monitor weather data closely and develop risk management plans to cope with such adverse effects.

Impact of Weather Risks on Businesses

High-impact weather events profoundly affect almost all aspects of businesses. These natural occurrences can cost global economies billions annually, affecting employee safety, productivity levels, and endangering logistics and distribution channels.

According to FEMA data, 40-60% of small businesses in the US never reopen after a natural disaster. The US Small Business Administration (SBA) has also found that 90% of companies affected by disasters fail within two years. With this data, we can say that half of business owners who have not gained sufficient economic strength lose their businesses entirely after exposure to extreme weather events.

Industries reliant on outdoor activities, such as agriculture, construction, tourism, and energy companies, are the hardest hit. However, no sector is completely immune to weather risks.

Increased Risk with Climate Change

The effects of climate change have become increasingly noticeable in recent years. The increase in extreme weather events due to climate change and their economic consequences has shown an incredible increase since 2010.

ncei billion dolar natural disasters graph
NCEI United States Billion-Dollar Disaster Events 1980-2024 (CPI-Adjusted)

According to the graph shared by NCEI, we can say that the frequency and severity of extreme weather events and associated economic losses have increased approximately fivefold from the 1980s to the present day. Another noteworthy point in the graph is that storms have seen the most significant increase. We can attribute this to increased sea surface temperatures due to climate change.

In the last 50 years, the increased frequency and severity of natural disasters related to climate change have resulted in $2.69 trillion in damages. This makes a weather-intelligent approach to business continuity even more crucial.

Identifying Vulnerabilities to Weather Variability

The first step in building a resilient response plan is identifying your business’s vulnerabilities to weather variability. For expert assistance in this regard, you can contact us. Unpredictable weather patterns can reveal strategic and operational weaknesses. Thoroughly evaluating these potential weak points not only allows proactive decision-making in managing the process but also presents an opportunity for improvement across various aspects of your business.

For example, some processes requiring attention to weather for a manufacturing business owner include supply chain operations, transportation logistics, facility infrastructures, and changes in consumer demand. Collaborating with Buluttan Weather Intelligence can help develop targeted strategies specific to your business.

Stay Safe with Customized Weather Indicators for Your Business

Once vulnerabilities are identified and assessed, robust protocols for handling weather-related emergencies should be established. These protocols should be carefully analyzed for weather risks specific to your industry and location. When vulnerabilities are addressed, and emergency protocols are followed, your business becomes better positioned to face future disruptions while maintaining operational integrity.

Risk Analysis and Evaluation: First, you should thoroughly analyze potential weather risks for the geographical region and sector in which your business operates. For example, if you are in an area prone to flooding, you should identify this risk and evaluate how to take precautions. Also, consider possible weather events during the seasons your business operates.

Emergency Response Plan: After identifying risks, create detailed emergency response plans for each risk. These plans should be designed to accommodate different scenarios based on the size and severity of the event. For example, measures taken in a mild flood situation will differ from those taken in a catastrophic flood situation.

Backup and Recovery Systems: Implement backup and recovery systems to address weather conditions that could disrupt primary operations. For example, have generators for power outages or backup systems for data loss.

Continuous Improvement: Regularly review and update emergency plans. Additionally, evaluate plan effectiveness through real-life scenarios. Continuous improvement ensures your business becomes more resilient to future weather-related disruptions.

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