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This summer has been HOT! The World Economic Forum reports that July 2024 was the hottest month ever recorded since global records began in 1850, with severe heat waves around the world becoming even more common and extreme weather events like hurricanes, flooding and landslides. In fact, due to the ongoing effects of climate change, 2024 in its entirety is likely going to be the warmest year in modern history.
As the world continues to grapple with the accelerating effects of climate change, the negative impacts on businesses and their workforces are increasing. Last year, Logica collaborated with Commonwealth on the study, “Feeling the Heat: Climate Change’s Impact on Worker Financial Security.” The report underscores the growing concern that severe weather events tied to climate change are not just environmental challenges—but are also significantly affecting people’s financial security.
The Economic Cost of Climate Change in 2024
According to the Center for American Progress, “heat-induced declines in labor productivity account for $100 billion annually in the United States on average and without action, productivity losses could reach $200 billion by 2030 and $500 billion by 2050.” These are not just statistics—they represent the reality faced by millions of workers affected by climate change. The Commonwealth and Logica study found that labor-intensive jobs, service positions and those working outdoors in the low to moderate income brackets are most susceptible to the consequences of climate change.
The study conducted last year also revealed that more than 80% of respondents have noticed an increase in extreme weather events. These events have tangible impacts on workers’ ability to perform their jobs and maintain financial stability. For lower-income workers, the consequences are even more severe, with many facing increased risks of bank overdraft fees, higher utility costs and health-related expenses due to extreme temperatures.
The Role of Businesses in Mitigating Climate Impact
“Feeling the Heat: Climate Change’s Impact on Worker Financial Security” also emphasizes the critical role that businesses must play in addressing the financial and social impacts of climate change, and their corporate responsibility—not only regarding business operations but also in supporting the community and employees. Proactive disaster relief efforts, such as providing financial assistance during evacuations, disaster pay for workers affected by closures, and providing extra resources are key to supporting affected employees. But going beyond that and also offering other climate risk mitigations like retraining programs for workers in affected industries, investments in climate-resilient infrastructures, and policies that provide financial support.
Building Resilience in a Changing Climate
The study findings from Logica and Commonwealth make it clear that climate change is not a distant threat but a present-day reality that needs action. As the effects of climate change continue to intensify, business leaders, policymakers and communities need to work together to address the challenges ahead. The study emphasizes that by understanding the financial impacts of climate change on workers and implementing strategies to mitigate these risks, financial security today and in the future can be protected. To download the report, go here.
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