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Extreme Climate Events Are Threatening Businesses’ Bottom Line

Extreme Climate Events Are Threatening Businesses’ Bottom Line

When record-breaking heatwaves cause train tracks to bend, airport runways to buckle, and roads to melt, as has happened in the United Kingdom this summer, it is likely that business performance will suffer. The frequency of these climate events is increasing, as is heat intensity, and companies clearly are not immune to the need to adapt, though their silence might make you think otherwise. Given that the problem is not going away, businesses will need to better manage extreme climate risks – but are investors sufficiently informed on the economic toll caused by the increasing frequency of extreme weather? It is becoming clearer that extreme heat can have devastating and costly effects.

Keeping cool, transporting goods, and scheduling flights as runways melted were just some of the challenges people – and businesses – have faced during the current European summer. As it became apparent that our workplaces and infrastructure might not be able to cope with extreme heat, we also saw unions call for workers to stay home. But could workers take the day off? The UK’s Health and Safety Executive stated, “There is no maximum temperature for workplaces, but all workers are entitled to an environment where risks to their health and safety are properly controlled.”

Are these rules sufficient in this new normal? Some EU countries already have upper limits, but many do not. The Washington Post reported last summer that U.S. federal action might be coming due to concerns over extreme heat for workers. While media reports have highlighted the toll of extreme climate events on workers and businesses, including in the retail sector, as companies’ sales have suffered as a result of unseasonably warm weather, there is little empirical evidence on the financial impact it can have on business. Here is where our research comes into play: How much of an impact does extreme heat have on business profitability?

Heat hitting the bottom line

We focused on the European Union and the UK because the region has a diversity of climate and weather extremes. They are a major economic force, with strong policies on decarbonizing their economies, but also rely on coal, gas, and oil for many sectors. When it is hot, these countries are forced to burn more fossil fuel to cool overheated populations, contrary to the need and desire to do the opposite. 

With detailed records on heat events at a local level, we connected weather data to a large sample of private and public companies in the EU and the UK. We focused on two critical aspects of a firm’s financial performance around a heat spell (at least three consecutive days of excessive heat): The effect on profit margin and the impact on sales. We also examined firms’ stock performance, and found that businesses do, in fact, suffer financially, and the effects are wide ranging.

For the average business in our sample, these impacts translate into an annualized loss of sales of about 0.63 percent and a profit margin decrease of approximately 0.16 percent for a one degree increase in temperature above a critical level of about 25*C. Aggregated for all firms in our sample, UK and EU businesses lose almost $614 million in annual sales for every additional degree of excessive temperature. 

Impact bigger than the data shows

We also found the intensity of a heat wave is more important than its duration. This financial effect might sound small, but remember, this is an average effect across the EU and the UK. The localized effect is much larger for some firms, especially those in more southern latitudes. The stock market response to extreme heat is also muted, perhaps for the same reason. We find stock prices on average dropped by about 22 basis points in response to a heat spell.

These average annualized effects include businesses’ efforts to recoup lost sales during heat spells and other climate-related events. They also consist of businesses in certain sectors and regions that appear to benefit from critically high heat spell temperatures, such as power companies and firms in northern European countries. While we show a systematic and robust result, our evidence probably further underestimates the total effects of heat waves. That is because businesses disclose very little about those effects due to lax disclosure rules and stock exchange regulations relating to extreme weather.

Financial data part of climate change

Without a doubt, better disclosure will help untangle these effects. Ideally, financial data will be segmented by climate risk and extreme heat dimensions, so investors are better able to price the risk. Regulators need to pay attention here, as investors must be able to price material risk from extreme weather. A good example is New Zealand, which is preparing to mandate climate risk disclosures with reporting periods starting in 2023. Such mandates recognize that poor disclosure of climate risk is endemic, and we do not have the luxury of time. For those businesses negatively affected by climate events, disclosing the number and cost of lost hours and the location of the damage would be helpful. However, it is not yet clear if climate disclosure standards effectively capture these risks, as companies have significant discretion about what to disclose.

It is not necessarily all about cost – some sectors might even benefit. While power companies, for example, might report increased sales from increased energy consumption, they are also constrained by the grid and the increased cost of production. And our evidence suggests there is little overall benefit to the energy sector. This does not rule out some windfall profits, so we need to understand more about both the positive and negative effects on each industry.

Finally, this July saw temperatures in the United Kingdom soar to 20*C above normal. Can businesses cope? Next time you feel the heat, pause to ask if this is also hitting the bottom line of your employer or investment portfolio.

David Lont is a Professor of Accounting and Finance at the University of Otago. 

Martien Lubberink is an Associate Professor of Economics at the Victoria University of Wellington. 

Paul Griffin is a Distinguished Professor of Management at the University of California, Davis. (This article was initially published by The Conversation.)

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How Businesses Mitigate the Risk of Unplanned Events During Uncertain Times

How Businesses Mitigate the Risk of  Unplanned Events During Uncertain Times

If you’ve ever applied for a loan or business insurance, you’ve had to check a box that asked whether you had a Business Continuity Plan in place. Many applicants tend to mindlessly check yes, even if they don’t have an actual plan in place.

That is not a good idea. There’s a reason why these institutions ask for a Business Continuity Plan. And it’s not to annoy you or give you unnecessary work. They are looking to minimize risk for you and for their institution. Many are required by law to have a Business Continuity plan in place themselves.

A Business Continuity Plan is a contingency plan that provides direction about how to keep the business in operation if something unexpected were to happen. Loan and insurance applications aside, having a plan forms part of a solid business strategy particularly during times of uncertainty.

Research indicates that close to 90% of businesses with a Business Continuity Plan reported having reduced disruptions, improved resilience, and faster recovery from disruptions. So there are a number of statistically proven benefits to having a Business Continuity Plan.

Disruptions can be natural or they can be manmade. Some of the most common disruptions – an unexpected death, divorce, distress, disability, or disagreement – will affect 1 in 2 businesses. Any one of these can have a devastating impact, particularly on a smaller business.

How devastating? The average disruption will cost the business about $81,000. And still 25% of businesses will shut down entirely. That’s pretty devastating for a business without the resources to buffer the impact.

Business interruption insurance may help but only in cases where ‘a covered event causes physical damage that results in losses’. Many of the most common disruptions would therefore not be eligible for a business interruption payout as many found out during the pandemic. Check the policy or speak with your broker.

The responsibility for protecting people, profits, and the company’s growth from unplanned events is an internal job. This type of risk management and risk mitigation cannot be outsourced or delegated.

Business Continuity Plans typically include information on:

  • Whom to contact in and out of the organization. This of course includes employees, but also customers, suppliers and key stakeholders, etc.
  • Key documents. It’s essential to record where to find documents like lease, mortgage, key contracts, along with the person(s) with access.
  • Financial matters. This is usually an important one because even during a disruption the business needs to be able to continue to pay and be paid. Basics include information on location of accounts and names of signatories to the accounts – i.e. who has access.
  • Operational workarounds. What are the key tasks that keep the business running? How are they performed now and how can they continue to be performed if the current way of working were for some reason impacted now? There’s a lot of talk about cybersecurity and cyber threats. If something were to happen that prevented the business from operating in its usual way, what workarounds will allow it to continue?

Thinking through and documenting this information ahead of time minimizes response times during a disruption. This level of foresight also reduces the number of decisions that would need to be made during a disruption when emotions are heightened and the business may be losing money.

Continuity planning allows business leaders to focus on making the right strategic decisions to navigate the disruption instead of expending energy on day to day operational decisions in the heat of the moment.

Documenting these areas ensures that the relevant information is at the business’ fingertips during a disruption when the most important thing needed is readily accessible information. Once this information is documented, it’s essential that the people tasked with responding are informed and trained.

Running a business comes with inherent risks. Business leaders taking on this risk own it by taking steps to proactively insulate their growth and operations from unpredictable and unplanned events. Having a business continuity plan is one of those steps.

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Sask. event businesses taking financial hit due to inflation, gas prices

Sask. event businesses taking financial hit due to inflation, gas prices


As the country faces record high inflation and high gas prices, some Saskatchewan businesses in the event and wedding industry are taking a hit.


Trystan Meyers is the owner and operator of Armed with Harmony, a DJ service in Saskatoon, and says contracts for events are signed one or two years in advance, not anticipating the cost of everything going up.


“It’s really hard to be able to go back to retroactively say ‘well now this is actually the price of the service you’re getting’ or the costs associated with that,” Meyers told CTV News.


He says it’s “frustrating” because the price for simple things they use every day like microphone batteries and tape for cords are rising in price.


Meyers says his business is eating the cost as they want to remain reputable and have a good relationship with their clients.


“It’s definitely affecting our bottom line and having two years of COVID also affecting our bottom line before that, makes it quite challenging just to survive as a business,” he said.


Owner of RSVP Event Design Crystal MacLeod says “it’s been tricky” as she didn’t see inflation and high gas prices coming to this degree.


“At this point, we’ve just had to eat the cost and honour the contracts that were signed in some cases, three years ago because of postponements due to COVID,” MacLeod said.


MacLeod says her business notices the cost when it comes to gas for getting to and from events, picking up and delivering items, and shipping costs for new items.


“As a small business owner, you’re always worried. It’s such an up and down experience,” she said.


While RSVP Event Design is the busiest it’s been in 23 years, MacLeod says it’s due to postponed events from the pandemic. This summer MacLeod says most weekends are filled with two to three weddings.


Regardless of inflation and gas prices, MacLeod says she was already planning to raise rates by around 10 per cent and that it’s “necessary.”


As an event planner, MacLeod anticipates companies or couples can expect higher food costs for their event or wedding in the next year.


“I have found that people perhaps are just so excited to be gathering again they’re spending a little bit more money on things for their event that maybe they wouldn’t have considered before,” she said.


With the summer being completely booked up for corporate events and weddings, MacLeod says she’s never had to turn away as much business as she has in the last six months. She’s almost at the point where she’s getting close to capacity for 2023. 

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Downtown businesses, festival hearing fears about protests on Canada Day | CBC News

Downtown businesses, festival hearing fears about protests on Canada Day | CBC News

Canada Day in Ottawa typically means fireworks and celebration downtown, but for events and businesses near Parliament Hill, the shadow of the Freedom Convoy still looms over the first in-person festivities in two years.

“It’s been a lifetime and it feels like it’s last week,” Kevin McHale, executive director of the Sparks Street BIA, said of the time that’s passed since the weeks-long February protest and occupation.

Protest groups — most of which formed out of the Freedom Convoy — have said they plan to hold ongoing demonstrations throughout the summer, starting on June 30 and building toward Labour Day.

McHale said recent protests, including “Rolling Thunder Ottawa” rally, have followed a more traditional trajectory — people come, say their piece and go home.

“I think the bigger concern is what all of the talk of it does for citizens in Ottawa,” he explained.

“The hype that builds around it, that builds concerns, that builds on the anxieties that people have from February. It’s just a lot more pressure on our members to cut through that and it’s very difficult to do so.”

Those fears can quickly turn into one more reason not to visit downtown and stop at a shop or restaurant, McHale added.

The Ottawa Jazz Festival is fielding similar concerns, according to executive producer Catherine O’Grady.

She said attendees and artists have both shared fears about protests, which led to her issuing a statement last week ensuring ticket holders that the event would not be “bullied or threatened by outsiders.”

‘We’re not cancelling our event’

O’Grady said Wednesday that she was drafting another message to performers saying they’ll be safe.

“Good heavens. It’s Canada,” she said. “Why do we have to reassure our artists that are coming from America that they’re going to be safe in the nation’s capital?”

The festival is set to take place during the Canada Day long weekend at Confederation Park, which was the site of a protest supply camp during the convoy.

When festival organizers originally spoke with the city about support, O’Grady said one of the “initial” reactions from staff was to ask whether they’d consider cancelling.

On Wednesday, following a meeting with police, the producer said she had been assured “every measure” was being put in place to ensure their safety. Police will be on the ground, keeping an eye on access to the park, and suggested making sure all festival trucks were clearly marked as they’ll be stopping vehicles on Queen Elizabeth Drive, she said.

“We’re really relieved to hear all that and of course we’re not cancelling our event,” said O’Grady. “Absolutely not.”

Summer of protests ‘not sustainable’ for police

Police previously said they were aware of the planned protest and were “planning accordingly,” along with Canada Day organizers.

Public safety consultant and former Ottawa police chief Charles Bordeleau said typical Canada Day “taps out” the resources available to police. He suggested the service is likely already reaching out to the RCMP, OPP and others to make sure they have enough officers on hand.

“If you don’t have the resources on the ground to set the tone and to communicate with those that wish to disrupt that this will not be acceptable then you will fail,” Bordeleau said.

Ottawa Morning8:39Veterans 4 Freedom

Several groups — most formed out of the Freedom Convoy — are planning protests and events in Ottawa throughout the summer. Including one that starts today, in the lead up to Canada Day. CBC’s David Fraser explained who’s behind these events – and how police are planning to respond.

Police learned lessons during the convoy, including the need for solid intelligence and the need for boots on the ground, the former chief added, but a summer of protests will be a challenge.

“I think the police service has been clear that it’s not sustainable … because of the number of resources that are required to keep everybody safe,” Bordeleau said.

City is not a ‘soapbox,’ says mayor

Mayor Jim Watson said the city and police are set to hold a press conference Monday outlining their plans for the long weekend.

“My message to people who want to come and celebrate our nation’s birthday is not to be intimidated by individuals who may be coming to Ottawa to cause trouble,” he said after Wednesday’s council meeting.

The behaviour seen during the truck convoy will not be tolerated, Watson added.

“This is not an opportunity for you to use our city as a soapbox for various grievances,” the mayor said. “Let the people of Canada celebrate their nation’s birthday in peace.”

Police officers on horseback ride along Sparks Street, one block away from Wellington Street, where vehicles have been parked to protest COVID-19 rules, Jan. 31, 2022. (Daniel Bouchard/Radio-Canada)

McHale said the February protest was the one time in decades that businesses on Sparks Street closed their doors, but after two hard, pandemic years, that’s not an option now.

He added he’s not overly concerned, though he did have a request for protesters.

“Please don’t scream at people as they’re walking by and interfere in their lives,” McHale said. “That’s all. And if everyone does that, then you can protest and [others] can come and celebrate.”

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Canada’s biggest vegan event is coming to Vancouver with over 200 plant-based businesses

Canada's biggest vegan event is coming to Vancouver with over 200 plant-based businesses

Canada’s largest plant-based event is coming to Vancouver for a weekend.

The Planted Expo will gather over 200 vegan food and lifestyle businesses at the Vancouver Convention Centre on June 4 and 5, and will feature speakers from around the world. 

Speakers will take the stage throughout the event, discussing aspects of veganism from food systems to parenting to feminism, featuring Seaspiracy’s Ali Tabrizi who will share why he made the documentary. There will also be a panel on the first day of the event focusing on running featuring members of the local vegan running community, including Zach Berman (The Juice Truck), and vegan influencer Erin Ireland (To Live For).

Vendors range from foods and supplements to skincare and services to organizations and publications, including many local businesses. Plus, unrestricted food sampling means there will be plenty to taste and try!

Planted Expo Vancouver

When: Jun 4-5 from 10 a.m. to 5 p.m.

Where: Vancouver Convention Centre – 1055 Canada Place

Cost: Adult $20; Youth and Senior $15; Kids can attend for free. Purchase tickets online.

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Oak Bay businesses abuzz with excitement over returning events – Saanich News

Oak Bay businesses abuzz with excitement over returning events - Saanich News

Basking in warm sun the day after a blustery spring storm, Martin Cownden can’t help but feel the vibe of positivity in the air on The Avenue.

It’s sunny and bright and indicative of what the Oak Bay business owner sees around town – optimism and smiling faces.

That fresh feeling is how the local Business Improvement Association (that operates as Oak Bay Village) is approaching 2022, president Cownden said.

“You can sense it as you walk up and down The Avenue and go in and out of the shops. There’s a renewed sense of excitement, optimism is almost an understatement.”

Part of the joy is the return of community events such as the Spring Nosh, Oak Bay Night Market and all the holidays. Oak Bay Village can request up to $500,000 from the district through local service area taxes each year. It generally utilizes $100,000 to host myriad events and sought the same for 2022 – approved by council April 11.

“We have this opportunity to continue to engage in our community, to build our community, to build business through our community,” Cownden said.

That means the Oak Bay Village Spring Nosh is set to return June 18.

The night market is slated to fill The Avenue from Wilmot Place to Monterey Avenue the second Wednesday of each month June through September. The events showcase vendors selling fresh and local produce, baked and canned goods, sauces and sweets, as well as a variety of wares. Wine, beer, cider and spirits are featured, as is live music and entertainment.

While still in its early stages, Halloween – usually featuring a huge fundraising pumpkin display behind municipal hall – looks to be a go starting mid-October and running to the spooky eve itself.

Christmas rounds out holiday events for the year.

Part of the positive is the effort everyone puts into the celebrations. The BIA is proud to develop business and community in the village with the support of the businesses, patrons, council and municipal staff, Cownden said.

“We really have a very positive working arrangement where all these branches come together and we have similar goals, just different roles.”


Do you have a story tip? Email: c.vanreeuwyk@blackpress.ca.

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Weekend events in Gulfport highlight local businesses, artists

Weekend events in Gulfport highlight local businesses, artists

If you’re looking for something fun to do this weekend, check out the Gulfport boulevard block party.

It’s an effort to support local artists, makers, business owners and musicians in the area.

Business owners said it’s a guaranteed good time while supporting locals.

“The culture is currently known to be a thoroughfare to get from point A to point B and what we’re trying to create as awareness that there are other stores in Gulfport that are really cool,” Jamie Edwards, Beach 5317 owner, said.

The Gulfport boulevard block party will be Saturday, March 25, from 11 a.m. to 3 p.m.

Along with shopping, there will be wine tastings and mimosas.

Also, this weekend in Gulfport is Art in the Yard. Artists and their work will be at dozens of homes throughout Gulfport.

The event starts Saturday at 10 a.m. This map shows where all these homes are.

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Downtown Tulsa Businesses Stay Busy With Multiple Events At BOK Center

Downtown Tulsa Businesses Stay Busy With Multiple Events At BOK Center

Friday, March 18th 2022, 11:07 pm

TULSA, Oklahoma –

It’s been a busy week for the BOK Center with A-Listers returning to Tulsa. The crowds for performances are bringing a much-needed boost for local businesses. News On 6’s McKenzie Gladney shared the businesses’ relief.