The JUST Report: The Business Impacts of Extreme Heat
(Juan Silva – Getty Images)
I returned this week from vacation in Europe, where the brutal heat wave gripping the continent is bringing home the realities of the climate emergency.
Whereas the human impacts of extreme heat, sadly, are obvious – heat-related deaths and hospitalizations, wildfire evacuations, water shortages, disruptions to emergency services, and more – the business impacts are also now revealing themselves.
Melting runways, buckled train lines, and travel chaos more broadly bring significant disruptions to logistics and the physical movement of people and goods. Surging demand for power creates grid reliability problems that heighten costs and reduce output. Temperature-induced threats to livestock and farmland result in lower crop yields, reduced food supply and increased food prices.
On the worker side, greater absenteeism and lower productivity affects scheduling, service and staffing, particularly in consumer-related sectors still struggling to recover from Covid. European researchers estimated last year that heat waves on average had lowered overall annual GDP growth across Europe by as much as 0.5% in the past decade
After flying over Greenland, where temperatures in Nuuk, the capital, hit a balmy 63 degrees Fahrenheit (it’s usually in the 50s at this time of year), I landed in New York to find the U.S. in a similar position. On Wednesday, the National Weather Service reported that 100 million Americans were under an excessive heat warning, and forecast extreme heat on parts of the Gulf coast spreading to the Great Lakes in the Midwest. This comes a month after a prior heat wave killed 2,000 Kansas cattle, a portentous sign for an already-stressed dairy and agriculture industry.
A Pew Research Center poll last week found that over the past year, 43% of Americans had experienced severe weather events in their local communities, 41% experienced unusually long periods of very hot weather, and 31% experienced droughts or water shortages. Of these respondents, 84%-91% believe climate change is a contributing factor.
So far, corporations’ responses to climate change have by and large been focused on reducing emissions. All good. But the past few weeks are also giving us a sense of how, similar to the war in Ukraine, companies will also have prominent roles to play in helping society adjust to climate extremes in the months and years to come.
This Week in Stakeholder Capitalism
Amazon is buying primary care provider One Medical as part of its expansion into healthcare.
A new study reveals that Hilcorp Energy, Exxon Mobil, and ConocoPhillips release the most greenhouse gasses among U.S. oil and gas companies.
Meta publishes its first-ever human rights report.
Microsoft signs a 10-year deal with Swiss direct air-capture company Climeworks to remove 10,000 tons of carbon dioxide from the atmosphere over the next decade.
What’s Happening at JUST
JUST Managing Director of Programs and Partnerships Tolu Lawrence speaks with Fiscal Note in this round-up on how companies should think about the reversal of Roe v. Wade when it comes to their employees.
Board Member Jean Oelwang joins the Passion Struck Podcast to talk about her new book, “Partnering: Forging Deep Connections to Make Great Things Happen.”
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“Capitalism can deliver for customers, it can deliver for shareholders, it can deliver for our team, and it can deliver for society. That is what we call at Bank of America delivering on the genius of the ‘and.’ Profits ‘and’ purpose. Shareholder ‘and’ society. That is stakeholder capitalism. That has driven the world’s prosperity and growth. That is what is needed in the future. You can do both—profits and purpose. It isn’t a false choice. It isn’t ESG. It isn’t woke capitalism. It is simply capitalism done right.”
- Brian Moynihan, CEO of Bank of America, speaking to the accusations of his company engaging in “woke capitalism.”
“The price cap that we’re pursuing is one of the most important ways we can make sure we don’t suffer from further increases in energy prices that would harm American households. And of course the Fed is taking action to bring inflation down.”
- Janet Yellen, speaking to NPR on how the Biden administration is trying to reduce gas prices during this inflationary period.
“Home Depot first began talking about climate-related risks in a 10-K it filed for 2017 and has significantly increased its disclosures over the past five years to include steps it had planned to reduce its carbon footprint. But Lowe’s only began in 2019, and its disclosure was essentially a mere mention of the words ‘climate change.’ It’s reasonable to expect that two companies in similar industries would be similarly affected, and this is where better rules come into play.”
- Michelle Leder, Bloomberg Opinion writer, on why the SEC’s proposed climate disclosures will benefit investors comparing companies.
Must-Reads of the Week
Inflationary pressures continue to press on the American people, with CNBC reporting that record levels of inflation have essentially pushed the federal minimum wage to its lowest value since 1956. Meanwhile, Bloomberg breaks down the effects inflation and gas prices are having on the choices middle-class Americans have to make to get by.
Planet Money looks at the attempt to create a new GDP prototype that can track income inequality on a much faster scale than currently possible.
Harvard Business Review questions whether that rash of “abortion healthcare” benefits companies are adding are actually trickling down to their most vulnerable workers.
The Conference Board reveals that only 10% of companies have made, or plan to make, a public statement about abortion since the overtuning of Roe v. Wade. We checked in with several experts to see how companies can navigate the fallout among their employees, and with paid parental leave and other benefits now more important than ever, we take a look at which companies are providing the longest paid parental leave for their employees.
Chart of the Week
This chart comes from a recent CNBC deep-dive on inflation showing that, when adjusted for inflation over time, Americans on average are only making 12 cents more than they did back in 1972. Watch the full video here.