Managing Director, Head of Recovre
The body’s ability to adapt is being tested as temperature records shatter worldwide, causing increases in heat exhaustion and heatstroke for vulnerable people and communities around the world. In the US, 40 workers per day die from excessive heat, largely while doing outdoor jobs such as farming, construction, and package delivery.
Extreme heat is the deadliest climate risk: Globally, it is responsible for almost half a million deaths per year, although data is lacking in many countries in the Global South, which experience some of the direst effects of rising temperatures. Extreme heat is associated with increases in mental health conditions, such as depression, and exacerbates a range of respiratory and cardiovascular diseases. Employee health and wellbeing was ranked as the number one people risk of concern for Australian HR and risk leaders, as per the Mercer Marsh Benefits 2023 People Risk Report: Pulse Check.
Beyond the impacts on worker health and wellbeing, extreme heat is causing myriad economic impacts – disrupting vital supply chains, slowing down business operations, and harming labour productivity. Globally, 675 billion hours are lost every year because of excessive heat and humidity, amounting to roughly 1.7% of global GDP. Last year, an estimated $310 million in labour productivity loss occured in Sydney alone due to extreme heat, with the number projected to grow to $700 million by 2050 .
With some 940 million people active in agriculture around the world, farmers are set to be the worst hit by rising temperatures. According to the International Labour Organisation, the agricultural sector will be responsible for 60% of global working hours lost from heat stress by 2030. These consequences are not evenly distributed, with some of the poorest communities in the world, such as West Africa, South East Asia, and Latin America, standing to lose the most from heat-fueled economic slowdowns. As heat waves increase around the world, adapting the workforce to extreme heat is top-of-mind for business leaders and policymakers amid an increasingly volatile climate and economic risk landscape.
There are opportunities for action, however, and for employers to support and protect their workforces. First, we need to change our mindset from looking at this as being a weather anomaly to actually being the new norm to which we need to adjust.
Let’s break it down into three time horizons – short term, medium-term, and long term.
Businesses in many industries will be impacted by the effects of extreme heat on human health. Heat waves can cause exhaustion, thereby worsening mental health, creating diabetic complications, and even leading to strokes. Projections show that 2% of total working hours could be lost each year due to heat stress at work, representing more than $4 trillion dollars annually by 2030.
Employers can protect their employees by taking a preventative approach. They can educate employees on what heat stress is, how it affects their health and safety, and when to know when hot is too hot, and for whom.
Employers can adapt work schedules. When extreme heat makes it unsafe for workers, employers will have to shift when people work; we’re already seeing this in action. For example, many farmworkers worldwide already work at night. This is ramping up in other sectors, including construction and transportation, where employers are embracing more overnight work or early morning starts, though developing health and safety risks related to these changes are being monitored.
Employers can plan for prolonged extreme heat events. In some situations, they might need to have flexible work schedules; for example, shorter working hours and longer rest periods. A big challenge for employers is how to budget for such an event. The value of insurance could be considered to address the volatility and likelihood of such events when trying to plan for them.
Employers can also review workplace safety guidelines around extreme heat, including internal and external policies. Although many government policies are still nascent in this space, groups such as the Occupational Safety and Health Administration (OSHA) in the US are beginning to act on extreme heat, launching a Heat Illness Prevention Campaign, releasing guidelines for Heat Hazard Recognition, and taking action against employers that fail to comply with heat safety standards – these efforts are still in their early stages.
The challenge is that many workers are demotivated to comply with these safety measures because it impacts their pay. Farm workers, for instance, are often paid a 'piece rate'. While enforcement is spotty, it is ramping up. OSHA recently sued a Florida farm labour contractor for $15,000 after the heat-fueled death of a 28-year-old worker.
Looking to the mid-term, employers can deploy technology-assisted heat stress monitoring. Using technology to move beyond policies is one way to better protect the workforce. Even with the most altruistic policies in place, there are some industries where workers face disincentives to take breaks, either personally or by their manager.
By using technology to monitor body temperature, employers can create policies free from judgment and that can improve audit credibility. We’re starting to see these strategies in action, with solar installers using wearable thermometers and drones remotely monitoring temperature, as was done during the COVID-19 pandemic in Bengaluru, India.
It is also possible to retrofit the workplace. Air conditioning, which may not have been necessary historically, can be added or alternative cooling systems can be explored, such as radiant cooling. One benefit of radiant cooling is that it does not require dehumidification, which can account for 60% of air conditioners' energy budgets in humid locations. Additionally, this process can include re-evaluating where cooling is necessary. For mobile workers, this includes their transportation. UPS recently announced that it is in the process of adding air conditioning to its delivery trucks after over a hundred heat-related illnesses and one death.
Tracking the efficacy of a heat-health strategy over time is another method that can be employed. Consider protecting any investment in retrofitting a workplace with improvement outcomes expected over time. This can include maintenance on technology and urban planning for building design, location, and transit access points that can reduce heat exposure for employees, especially as the workforce ages.
Heat should also be discussed during labour contracting and negotiations. Unions are raising this issue and acting on it. Recently, a trade union in Greece announced a recurring four-day strike until methods of improving heat related safety conditions were identified.
In the long term, employers should prepare for public policy change. While many countries have limited or no rules about working in extreme heat, this is likely to change as increasing percentages of the workforce must routinely face this issue. This will probably be an uphill battle – as mentioned before – as many of the policies that protect workers also impact income and/or productivity.
Catalysing public-private partnerships for longer-term investment needs should also be integrated into long-term plans. While we focus on the workplace and the pivotal role of employers in protecting the workforce against future extreme heat risk, we recognise the need for partnership and investment across public entities and private capital. The long-term benefits both for employers and employees include the availability of shading infrastructure (i.e., trees, covered walkways, etc.) and urban ventilation pathways, as well as reductions in greenhouse gas and heat emissions from vehicles.
In the US, extreme heat kills more people than hurricanes, floods, and tornados combined. Extreme heat is dangerous across all segments of society, with 5 billion people – over half of the world’s population – experiencing health-threatening extreme heat for at last one month per year. However, the risks of extreme heat are not distributed equally, with people who live and work in dense urban environments and those in the Global South at disproportionate risk, even if the working environment is easier to control (i.e., indoor workspaces).
Furthermore, rising temperatures seriously impair the performance and health of your greatest assets – your people. A decrease in worker productivity can lead to further downstream consequences, including lower worker incomes and greater financial strains on individuals and families. Cities could see losses in sales, income, and real estate tax revenues as well.
As the Earth warms, short-, medium- and longer-term innovative strategies and investments are needed to build the societal and economic resilience to deal with extreme heat. This can only be successful if we take a public-private partnership approach with employers being an important part of this change.
Originally published on www.weforum.org by:
Managing Director, Head of Recovre
Chief Client Officer, MMB
LCPA 23/528. Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238983) (“Marsh”) arrange insurance and is not the insurer. This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances. For full details of the terms, conditions and limitations of insurance covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements.