The UK has experienced four heatwaves this summer; June’s alone cost the economy over £1bn in lost output, according to a study from the Grantham Research Institute.

But behind the estimates, there is no formal framework to measure the financial costs of these events. At company level, it gets even worse: the financial impact is often not assessed at all.

Large organisations within the scope of CSRD are beginning to assess the financial implications of climate-related impacts, but many businesses outside its remit have yet to undertake this level of analysis. For SMEs and mid-sized companies, there is currently little external pressure to do so unless requested by insurers, lenders or other stakeholders. As a result, most business leaders will never know how much this summer has actually cost them…and therefore miss affordable strategies to mitigate repeat impact in the future.

Disruptions are rarely captured in formal reporting against a specific climate risk or extreme weather event. Examples include an air conditioning failure that brings a production line to a standstill for hours, increased absences during periods of extreme heat or site operations being disrupted by power outages and water restrictions.

None of these events make the headlines, but together, they can have a significant impact on year-end results. If these risks are not recorded, organisations cannot effectively quantify their potential impact, anticipate future challenges or build a robust case for adaptation.

The first step requires no budget and consists of recording every climate-related event experienced by the business in order to build a history of actual exposure.

The Climate Risk team at Sustainable Advantage has created a ready-to-use Climate Debrief Toolkit.

The toolkit will provide you with:
→  A ready-to-deploy framework designed for seamless implementation across your organisation.

→ A function-by-function guide (HR, operations, supply chain, customers, management and infrastructure), helping you ask the right questions internally. Rather than simply asking, “Were you affected by the heatwave?”, the guide helps teams identify what actually happened, where, for how long, and with what consequences.

→ A 360° view of what actually happened across every link in the value chain, while also building a documented history of your actual exposure. For businesses looking to quantify their financial exposure to climate risks, systematically capturing and documenting what happened is a critical best practice.

→ A solid framework to put climate adaptation on your Executive Committee’s agenda, backed by the evidence and data needed to conduct detailed scenario analysis, assess potential business impacts, and develop a targeted, evidence-based adaptation plan.

If you’d like to be sent the Toolkit, comment “Adaptation” below and our team will share it with you. ♻️

For more information, please contact Louis Magnani for the UK or Fanny Guezennec for Europe.