Using Climate Data to Protect Employee Health

Using Climate Data to Protect Employee Health
April 21, 2025 9 mins

Using Climate Data to Protect Employee Health

Using Climate Data to Protect Employee Health

Employers are increasingly looking to defend the health and safety of their employees in a changing climate. By modeling the impact of weather on employees like they do for physical risks, employers can proactively establish solutions to protect workers.

Key Takeaways
  1. Extreme weather can be harmful to employees’ health and safety, similarly to how it can be harmful to property.
  2. HR professionals should partner with traditional risk management teams with relevant experience to model which employees are at risk and what risks they are exposed to.
  3. Modeling climate risk is an important first step to implementing mitigation strategies that support employees and protect business continuity.

Businesses typically have experience preparing for the impact of natural disasters and other catastrophes on their operations. The risk to a factory from a hurricane, for example, is quantifiable and can be insured against. Now the lessons of physical risk are increasingly being applied to an organization’s workforce. As more workers are affected by natural disasters and extreme weather, there are new human capital risks emerging that companies must address — from the health of employees to talent supply challenges.

Heatwaves, which claim thousands of lives each year,1 are one of the major risks people face. Outdoor workers are especially susceptible. Rising temperatures can also increase the likelihood of chronic conditions such as heart disease, and further the chances for pregnancy complications.2

These negative effects impact labor productivity, especially in industries like construction, costing the economy billions in lost productivity and output. They also have talent implications — from employees relocating to avoid extreme heat, to difficulty attracting talent to work in certain areas. Wildfires and floods are other risks occurring more often, with greater intensity and in new locations. Wildfires pose health risks including short-term effects like smoke inhalation and long-term effects like asthma and lung cancer. Flooding from storms is another growing risk to people, with the potential to cause water quality issues that lead to illnesses.

“These events often have wide-ranging impacts on health, talent supply and productivity,” says Rebecca Warnken, senior vice president of Aon's Health Solutions practice in North America. “They can also exacerbate existing health disparities, and present additional challenges to accessing appropriate care — all of which have financial implications as well.”

With this in mind, addressing these challenges is vital for employers to keep their workplace safe and prepared in anticipation of and during extreme weather events.

Quantifying the Risk

Employers are increasingly focused on identifying and mitigating risks through collaboration between HR and risk management teams. In an Aon survey of companies with employees located in Los Angeles during the recent wildfires, 66 percent said they do not have a formal disaster response process in place. This cross-functional collaboration will be critical, as more than 80 percent of companies surveyed are reviewing or improving their disaster preparedness plans.3

70%

or 2.4 billion workers globally are likely to be exposed to extreme heat, up from 65 percent in 2000.

Source: International Labour Organization

Historically, risk mitigation has been focused on the value of physical property. The challenge for HR professionals will be applying these risk management lessons to the risks faced by workers. By taking climate model data and overlaying it on their workforce, companies can begin to understand the cost of extreme weather on their human capital organization. To accurately quantify these risks, HR leaders should take a three-step approach:

  1. Analyze data illustrating the impact of climate-related risks on employee absence, health and disability claims, demographics and other workforce data to understand correlations. These include utilization patterns, social determinants of health (SDoH) factors and the prevalence of climate-sensitive health conditions.
  2. Identify vulnerable populations in the workforce using predictive modeling, climate scenario analysis and demographics data, and determine materiality of risk for identified areas and cohorts.
  3. Develop conclusions and approaches to mitigate risk and enable access to high-quality preventative healthcare, chronic condition management and mental health support for at-risk members.

295 B

Extreme heat causes 295 billion hours of productivity loss worldwide.

Source: Dialogues Economiques

Mitigating the Risk

Once risk is quantified, assess the impact across three types of risk to your human capital: acute, chronic and operational. By breaking them into these categories, companies can begin to develop mitigation strategies.

  • Acute Risks: Acute risks, or those risks driven by events, are traditionally the easiest to identify impact. These risks include having a large percentage of the workforce in an area prone to storms or having offices in places that regularly have wildfires. But as certain weather patterns change, risks may become more unpredictable or widespread. Effective mitigation means being prepared with business continuity plans, having funds for one-time emergency payments and establishing a formal disaster response plan. Parametric insurance solutions can help deliver funding that can be used strategically and in a timely manner.
  • Chronic Risks: These revolve around the longer-term consequences of a changing climate and their impact on weather patterns. Workers may need to adapt to new types of extreme weather in different circumstances, whether that’s heatwaves becoming longer, more frequent or more intense, or flooding in new areas due to sea level rise or increased rainfall. Having flexible work arrangements can help keep workers productive in these scenarios.
  • Operational Risks: Operational risks could be thought of as more behind-the-scenes issues. Identifying key decision makers in advance and empowering them to act in a catastrophe is one way to mitigate these risks. Another is to ensure that work sites and schedules are appropriate for extreme weather (for example, limiting outdoor work to early morning and evening during heatwaves). Operational risks also include a changing regulatory environment. Some jurisdictions are putting in place regulations that protect workers from extreme weather working conditions, mandating things like sun protection and water breaks during extreme heat. Knowing where those regulations are (or soon may be) is not only important for compliance but also for competitive reasons.

Talent Shortages and Financial Wellbeing

As certain catastrophic events are projected to become more intense and more frequent, people may decide to leave vulnerable areas, leading to talent shortages. This is especially true if the weather directly affects their work. An area prone to heatwaves may lose construction workers first, for example, but the shortage of talent will likely broaden as whole families relocate.

Recovering from extreme weather events can also impact employees’ financial wellbeing. Increased occurrences of natural disasters can raise personal insurance premiums or, in some cases, restrict the ability to get coverage at all. One stopgap solution is to allow workers to access retirement savings without the typical penalty or tax implications to help rebuild after a catastrophe. While this can be an effective short-term solution, employees who do this may fall behind on their retirement plans, so it may not be feasible for everyone. Finally, productivity may also suffer during the immediate aftermath of an event or due to ongoing added stress that can lead to burnout and poor health outcomes.

Quote icon

There is an insurability crisis looming. If homeowners aren’t able to insure against natural catastrophes, their property value could plummet, damaging their financial wellbeing.

Patrick Kelly
Head of Climate Analytics, Climate Risk Advisory, North America
Modeling the Impact of Extreme Heat on Human Capital Outcomes

Modeling the Impact of Extreme Heat on Human Capital Outcomes

Aon recently modeled climate impacts on a set of existing clients in a variety of sectors, powered by regression analysis and empirical models. By utilizing a variety of different data sources including climate models, claims data and employee demographics, we could identify talent shortages and quantify the potential impact of extreme heat on claims, absences and lost productivity. These methods can be used on a variety of climate-related scenarios with different parameters. “Employers should be proactive in understanding where their people are more at risk from weather events and take action, such as offering tailored benefits and emergency relief,” says Rebecca Warnken, a senior vice president in Aon’s Health Solutions practice.

Employers know that the changing climate will affect the health and safety of their workforce. By overlaying health and demographic data with climate data, companies can model the risk presented by extreme weather events to their workforce, quantify the impact and cost, and begin to implement effective mitigation strategies. Having an advisor with the advisory experience to model climate risk can help employers make better decisions.

Aon’s Thought Leaders

Adrian Champion
Head of Climate Analytics, Europe, the Middle East and Africa 

Rebecca Warnken
Senior Vice President, Health Solutions, North America

Lauren Clarke-Wiest
Head of Climate Hub, Climate Advisory, Asia Pacific 

Ben Batho
Data and Analytics Leader, Health Solutions, Europe, the Middle East and Africa

Madeleine Catzaras
ESG People Solutions Leader, Health Solutions Europe, the Middle East and Africa

Janet Faircloth
Senior Vice President and Thought Leadership Leader, Health Solutions, North America

Patrick Kelly
Head of Climate Analytics, North America

Nancy Ho
Partner, Talent Solutions, North America

Andy Rallis
Executive Leader, Human Capital Analytics, Asia Pacific

Matt Wiehl
Senior Director, Actuarial and Analytics, Asia Pacific

1 World Health Organization, Heatwaves
2 Climate Change Impacts on Health, U.S. Environmental Protection Agency
3 Aon’s 2025 Wildfire Response Pulse Survey

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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