The impact of extreme weather events on business performance, both positively and negatively, should not be underestimated. Abnormal weather is the difference between observed weather and its normal value, which is typically calculated using the 30-year average.  With the news that Ireland can expect plunging temperatures and extreme storms to become a more regular occurrence, the question of how companies can best prepare and respond should be an increased priority for business owners. 


Production, supply, demand and operations can all be impacted by extreme weather. Abnormal weather patterns offer a unique form of disruption for companies and, in recent years, organisations in the fields of energy, water, telecoms, transport, retail, leisure and agriculture have all been affected in a variety of ways. Small businesses are the most vulnerable, with there being no simple way of telling how long the weather-related disruption can last. Prolonged periods of disruption can lead to financial distress, triggering shortfalls in sales, store closures and even job cuts.   


Thanks to climate change, the frequency and intensity of abnormal weather patterns have increased too, with a shift to warmer temperatures only set to further the threats. Financial losses caused by adverse weather that didn’t seem material enough for companies to concern themselves with 10 years ago, are now examined and managed by weather-based financial instruments that seek to cover the risk to which businesses are exposed. As recently as October 2019, the Irish government were forced to send out an orange weather warning in preparation for ex-hurricane Lorenzo, proof that the time has now come when businesses can no longer fail to have an effective back-up plan in place to limit the negative impacts of a disaster.   


Failure to plan 


The European Economic Area records that, over the period 1980 – 2017, total reported economic losses caused by weather and climate-related extremes in the member countries amounted to approximately EUR 453 billion. In 2018, Sinn Féin proposed a bill to make it compulsory for employers to close its place of business during a red alert weather warning. It stated that in the event of a place of work being subject to a red weather warning, an employer would be required to “close such place and make reasonable measures to inform all employees to stay away from it for the duration of that warning.”  


Organisations must review assumptions about the risks they face because of their direct influence on both organisational resilience and the bottom line. Key to deciding how to move forward is making an accurate assessment of the level of risk a business is willing to accept, and taking a multi-tiered approach to assess and plan for a range of threats.


Advice for organisations to consider today 


To best address extreme weather events, companies should consider the following: 


  • Get a good weather forecast. The quality and range of forecasts has improved markedly in recent years.
  • Evaluate how to react to a disruption of this nature – organisations should look at completing an assessment of business impact, risk and overall resilience. 
  • Ensure ICT is robust yet agile – businesses must ensure an ICT service continuity plan is in place, and that it extends to disaster recovery scenarios. 
  • Prepare operations for action accordingly – this should consider business continuity processes, training and awareness processes for staff at all levels of the business, and vendor/supplier risk management too. 
  • Develop crisis leadership competencies within the executive team – this can include training, executive coaching and coached crisis scenarios.   
  • Foster a mutually supportive network of suppliers and stakeholders – examine market-wide crisis exercises and identify best practice. Also assess supply chain resilience. 


A growing trend 


Environmental risks have grown in prominence over the last decade and we can expect this trend to continue. Findings from the World Economic Forum’s 2019 Global Risks Report send a clear message to companies, with extreme weather events, natural disasters and climate change all highlighted as top concerns. 


As tempting as it might be to think “that’ll never happen to us”, understanding and investing in a business continuity plan, and business interruption insurance can greatly support recovery. The latter can be an invaluable safeguard for a business, for example allowing for the reimbursement of ongoing expenses and lost gross profit while a permanent business location is being repaired. 


Disasters can happen when least expected. Companies might not be able to prevent the storm, but they can take steps to handle the situation and keep operations up and running with minimal disruption. This is what the most resilient companies do, and it’s why they’ve stayed afloat while others have not.

By Jim O Brien/CEO

CEO and expert in transport and Mobile tech. A fan 20 years, mobile consultant, Nokia Mobile expert, Former Nokia/Microsoft VIP,Multiple forum tech supporter with worldwide top ranking,Working in the background on mobile technology, Weekly radio show, Featured on the RTE consumer show, Cavan TV and on TRT WORLD. Award winning Technology reviewer and blogger. Security and logisitcs Professional.