dcblogs writes: A recent study by the National Bureau of Economic Research found that companies are quietly adapting to rising temperatures by moving operations from hotter to cooler locations. Researchers analyzed data from 50,000 companies between 2009 and 2020. “To account for the economic impact, researchers found that when a company that employs equally in two counties experiences a heat shock in one county, subsequent employment growth increases by 0.7%. “in unaffected counties for three years,'' TechTarget reports. “This finding is important given that the average employment growth rate for surveyed companies is 2.4%.”
Heat shock is characterized by serious health and energy grid impacts and increased fire risks, which will force companies with multiple locations to reconsider their geographic operations. Despite this trend, states with the highest number of heat-related deaths, such as Arizona and Nevada, continue to see rapid business expansion. Experts believe that factors such as labor, taxes and regulations still outweigh environmental and climate risks when it comes to choosing a business location. However, heat-related deaths are on the rise. In the Phoenix area alone, 425 people will die from heatstroke in 2022, and the same number will occur in 2023, a record high for the region.
This research suggests that the impact of climate change on business operations is becoming more apparent. Companies are beginning to assess climate risk as part of their regular risk assessment processes.