Once-in-a-millennia flash floods. Historic heatwaves. Record-breaking storms. Unprecedented weather events have become the norm — increasingly frequent, severe reminders that our climate is recalibrating, and crisis scenarios are becoming more common.
But as we acclimatise to these effects of climate change, we’re at risk of becoming numb to extreme weather events — a very human tendency that, when translated onto organisations and society more broadly, presents very tangible dangers. Getting caught unprepared for an extreme weather event brings existential threats to human lives. The material costs are also devastating. It’s now estimated that climate-related extreme weather events sucked $2 trillion out of the global economy over the past decade.[1] These risks and costs have more voices calling for a more proactive approach to crisis and emergency management and resiliency planning for extreme weather.
But efforts to protect against extreme weather events come with their own hefty price tag. Early warnings and preemptive shutdowns drive immediate disruption to businesses, with lasting ripple effects up- and down-stream. Notable voices warn that businesses (and society in general) have become too cautious and too risk-averse — that the cure might be worse than the disease.
Here’s the critical question:
Is weather caution a liability or a life raft? In an era where scientific reports and economic analyses detail escalating climate risks, is it worse to be over-cautious, or dangerously complacent? Share your thoughts in our discussion forum.
The case against caution: Is the cure worse than the disease?
With any element of public safety or corporate risk, the pendulum is perpetually swinging between extreme caution and “numb” complacency. Looking back, it’s clear that the COVID-19 pandemic pushed a broader shift toward a culture of caution — instilling a collective fear of the worst. We saw politicians — including some that prominently downplayed risks — end up in hospital beds, fueling a societal shift towards protective instincts. This fear converged with a corporate liability culture that’s been brewing for decades — where increasingly litigious societies are driving fear of litigation, pushing companies toward risk-aversion.
But being over-cautious, while seemingly protective, can bring significant costs. We see them in the swift decisions to shut down infrastructure, close schools and halt commercial operations, leading to widespread disruption in transport and daily life. As severe weather events become more frequent, the disruption compounds.
In addition, some critics believe the spectre of extreme weather is being wielded for profit-seeking means. For example, some say insurers are profiting from an ‘over-caution bias’ — raising premiums more than is justified by climate risks. Moreover, while extreme weather events undoubtedly play a role in skyrocketing insurance costs, data suggests that other factors will continue driving up insurance costs regardless of climate and weather impacts. These range from broad inflation making rebuilds more expensive and rising healthcare costs adding to insurance payouts, to ever-increasing litigation costs being baked into pricing strategies.
Challenge your thinking:
At what point do the economic costs of widespread, preemptive shutdowns outweigh the potential, but unconfirmed, risks? Join the live debate on Wednesday, 30 July.
The peril of complacency: A storm waiting to happen?
While the aforementioned costs of over-caution are more insidious, complacency can lead to much clearer and more catastrophic outcomes.
There are no stopping extreme weather events — and accurately predicting them remains a less-than-perfect science. But without clear, well-resourced crisis management plans and processes, organisations and communities quickly tip from crisis into chaos — reacting in real time instead of working through planned responses. This inevitably makes the response slower and less effective — and makes recovery harder, longer and vastly more expensive.
Those financial losses from extreme weather keep accelerating. According to the World Economic Forum, fixed asset losses alone could drive $560-610 billion in yearly losses by 2035 for listed companies, equating to a 6.6-7.3% drop in earnings. Industries like travel, utilities and telecommunications could face losses amounting to more than a fifth of their earnings by 2035, with the average telecom company potentially losing $510-563 million per year due to extreme heat vulnerability.[2]
Most tragically, lack of preparation puts lives at risk. The lone workers working out in the field are most exposed to weather events and bear the brunt of the extreme weather risk. Moreover, they’re often left to assess risk and calibrate response all on their own — rather than being supported by a well-developed weather response plan.
Unfortunately, this is not a temporary trend. Weather and climate experts warn that the frequency and severity of weather events are expected to increase continually. This is one reason that resiliency has become the new buzzword in boardrooms and shareholder meetings.
In a world where these extreme weather events become the norm, businesses cannot afford to be unprepared. Those that have the plans and resources in place and are able to both mitigate impacts most effectively and address damages most swiftly, will build operational resiliency to outcompete their markets.
Challenge your thinking:
Is the “fiduciary responsibility” of boards to evaluate climate risk genuinely translating into proactive investment, or is it still largely reactive post-event? Share your thoughts.
The collateral damage of extreme weather
Beyond the most visible impacts of extreme weather — the direct physical damage and costs, as well as human injuries or deaths — often the greatest risks and costs lie in cascading knock-on effects that ripple through businesses and communities.
For example, hurricanes Helene and Milton left millions without power for days or weeks. These blackouts pose direct health risks including temperature-related illnesses, food poisoning and carbon monoxide poisoning. Power outages also cost an estimated $150 billion in annual in the U.S. — from data loss incidents to inventory spoilage.
Those cascading impacts continue with environmental risks like amplified chemical hazards. As temperatures soar or plummet, the risks around hazardous substances rise dramatically. Warmer weather increases toxic chemical exposure through faster vaporisation and breakdown. The “heat hazard multiplier” effect also increases chemical reactivity, creating further risks as already flammable or volatile chemicals behave even more unpredictably. On the other end of the thermometer, the February 2021 cold snap in Texas led to hundreds of emissions incidents at oil, gas and chemical plants — releasing millions of pounds of toxic chemicals into the environment.
Challenge your thinking:
Does your resilience plan stop at first-order impacts — or are you considering the cascading risks of extreme weather events? Weigh in in the Situation Room discussion forum.
The predictability puzzle: Can we every truly know?
Predictability sits at the centre of this dilemma. If you knew, with 100% certainty, that a devastating storm would hit your business, then there would be many fewer concerns about being over-cautious.
But the concept of predictability is being pushed and pulled from two sides. Forecasting technology continues rapid advances — and access to higher-quality forecasting is being democratised through new applications. Governments and meteorological offices are leading the charge in advancing forecasting, like the UK Met Office’s new supercomputer transitioning to Azure cloud, promising “better forecasts ahead.”
The vision is to get to “post-code” or “Zip-code” forecasting — predicting impacts down to tens of kilometers, enabling highly specific precautionary action. A new frontier sees forecasters using this hyper-local weather data to examine very specific scenarios, like wind gusts on a particular runway or slickness of pavement on specific roads, to make real-time operational decisions.
Yet, storms are also proving increasingly unpredictable. The rapid intensification of Hurricanes Milton and Helene in the US (2024), and localised torrential rain and flooding in Spain (November 2024), highlight nature’s escalating volatility.
Proponents of advanced forecasting believe we will be able to achieve this kind of hyper-local, scenario-specific forecasting — and move closer to that ideal of 100% certainty — so we can fine-tune our preparation and anticipatory responses, pushing closer to the perfect balance of proactive protection with minimal disruption.
Detractors say this is hubris at its finest. They say it’s foolhardy to think we can use even our most sophisticated AI models to crack nature’s code (particularly with climate change shifting weather paradigms). And they warn that investments in forecasting are sucking attention and resources away from proper preparation and resiliency planning.
Planning beyond the next storm
The difficulties around acute weather predictability are also pushing a new frontier in forecasting: predicting how climate risk will impact specific locations and operations over longer time horizons. Companies can now access science-based insights on the materiality of extreme weather risks to their specific geographic footprint — anticipating whether a given warehouse, production facility or critical supply route is going to face an increased risk of extreme heat, prolonged drought, flash flooding or other extreme weather over the next five, 10 or even 20 years. By translating complex climate data into clear, actionable insights, businesses can inform strategy and build resilience across their operations.
In this video, Callum Reay, Analytics Engineer at EcoOnline, breaks down how businesses can move beyond generic forecasts to understand the real, location-specific risks — and how to turn physical climate risk data into clear, actionable decisions.
Challenge your thinking:
Should investment prioritise hyper-accurate prediction, or focus more on using longer-term forecasting to build universal resilience capabilities?
Alerts, warnings and public engagement: Are we crying wolf?
Closely related to questions around our ability to confidently and accurately predict weather events is the question of how to convey that information.
Broadly, we’ve seen a growing trend toward proactive alerting — reflecting that broader post-COVID shift toward being prepared (or what some call over-cautious).
But while there’s an obvious need to engage the public with information on potential extreme weather events, there’s also one immense risk of being too trigger-happy in sending out those alerts: the “boy who cried wolf” phenomenon — in more modern times referred to as “alert fatigue.”
We’re seeing alert fatigue across the business world — from cybersecurity risk to climate risk. We’re also feeling it in our daily lives, with media preferentially covering catastrophes and amplifying anxieties, because fearmongering earns eyeballs and clicks.
When alerts become an everyday occurrence, it grows difficult to filter the most critical risks from the noise. If companies and people grow numb to weather alerts, the entire value of forecasting (however accurate) declines to near zero. Put another way, when the sky is always falling, we stop looking up.
Challenge your thinking:
How do we create alerting that accurately reflects forecasting confidence levels — and how do businesses tailor proactive responses based on these more transparent alerts? Add your voice to The Situation Room.
Beyond the storm: A broader resilience mandate
Hurricanes and flash floods garner the biggest headlines and the greatest anxieties, but extreme weather encompasses a wider spectrum of threats: prolonged heatwaves increasingly affecting employee health and perishable goods, water stress becoming a major risk to global supply chains, and intense rainfall leading to power outages and property damage. The core challenge is universal: how to build business continuity in the face of escalating environmental volatility.
What does resiliency to extreme weather look like? It means having plans that go beyond just shutting things down. It means robust backup systems; clear communication protocols and flexible contingency plans tailored for diverse scenarios. Regular training and drills are no longer optional; they are vital to build confidence and equip teams to respond effectively under pressure.
Weather preparedness is an unavoidable conversation
The choice between over-caution and complacency is a false one. In reality, businesses are navigating a treacherous path where both extremes carry severe, potentially existential consequences. The escalating frequency and severity of extreme weather events demand a strategic reckoning.
Moreover, regardless of where you fall on the over-cautious vs. complacent spectrum, the truth is the majority of companies have a lot of work to do. A recent Marsh survey showed that half of corporate respondents were impacted by extreme weather in the past three years, yet only half prioritise business continuity planning, 41% invest in asset engineering and only one-third adapt working patterns.[3] This highlights significant gaps.
The good news is that investing in resilience and adaptation pays off: every $1 spent can generate a return of $2 to $19.[4] By minimising disaster losses, avoiding capital costs and cutting operational expenses, a dollar spent on adaptation and resilience today yields a median future savings of 5 times as much, and in some cases more than 50 times as much.[5]
The stakes are high: human lives and livelihoods depend on our ability to adapt and innovate. Therefore, it is essential to engage in critical dialogue and contribute to the evolution of preparedness and resilience.
What side of the spectrum is your business on? Are you actively choosing to be prepared — or are you actively choosing to under-prepare. Share your thoughts and join the debate.
Join the live debate: Crisis Fatigue or Dangerous Disregard? Navigating Extreme Weather’s Edge
Join us for a live debate as we unpack the rising cost of weather-related disruptions, the real risks of under-preparation, and how businesses can build meaningful resilience in the face of once-in-a-millennia storms, floods, and heatwaves.
Wednesday, 30 July at 10:00 AM EDT | 3:00 PM BST | 40 minutes
