Climate-Driven Health Impacts: The Missing Financial Risk
Understanding the hidden costs of climate change on human health and their material financial implications for businesses, investors, and communities.
Executive Summary
Climate change presents a profound and accelerating threat to human health, generating a spectrum of direct and indirect financial costs that remain largely absent from current corporate risk frameworks
From the immediate aftermath of climate-driven disasters such as Hurricanes Helene and Milton, to the long-term burdens of respiratory disease, mental health challenges, and heatrelated illness, climate-driven health hazards translate into significant economic impacts. These include not only direct healthcare and infrastructure expenditures, but also indirect costs tied to lost productivity, diminished quality of life, and weakened community resilience.
Existing risk assessment and disclosure practices while robust in their treatment of physical and transition risks consistently overlook the human health dimension. This omission creates a financial blind spot that underprices risk and leaves businesses, investors, and communities exposed. Existing frameworks, though instrumental in reshaping corporate climate action, underrepresent or silo the wide-ranging health consequences of a warming world.
The financial stakes are significant. With nearly 80% of large U.S. companies self-insuring health benefits, climate-driven illness directly translates into escalating employer costs. Rising illness burdens and reduced labor participation also generate macroeconomic consequences, from inflationary pressures to GDP drag systemic risks that cascade through insurers, government budgets, and pension funds.
Adaptation presents a parallel opportunity. Workforce protections, resilient infrastructure, and innovative insurance design can reduce foreseeable health costs while strengthening resilience. By embedding health considerations into disclosure frameworks such as TCFD, ISSB, and emerging state and federal requirements, organizations can move beyond compliance to proactive resilience planning.
To address this gap, a proposed approach to integrate climate-driven health risks and costs will be introduced. This approach integrates climate-related health risks and associated costs alongside actionable steps for embedding health considerations into existing disclosure practices, ensuring that the financial system fully reflects the scale and scope of climate's impact on human health.
Acknowledgments
This primer was developed through the collaboration of dedicated authors who bring diverse expertise across climate, health, finance and insurance. Their collective insights shaped guidance for integrating health into financial risk assessment. We thank them for their commitment to advancing this important conversation.
Seema Wadhwa, CEO, Health in Climate, Net Positive Solutions
Kathy Gerwig, Author/Advisor, Healthcare Environmental Stewardship
Dave Jones, Director, Climate Risk Initiative, Center for Law, Energy & the Environment, UC Berkeley Law School
Rob Roy, SVP, Chief Investment Officer, Co-Head of Environmental Sustainability, Advent Health
Climate Hazards
Risk Frameworks Health Impacts
The Financial Stakes
Climate change is already a direct driver of corporate financial losses through its impacts on human health. The financial stakes are substantial. These losses directly affect self-insured employers, insurers, and investors yet they remain invisible in most corporate risk disclosures. For employers, the stakes are immediate. Among large U.S. companies, 74% self-insure at least one health plan (EBRI, 2024), meaning climate-driven spikes in illness, heat-related hospitalizations, or respiratory conditions translate directly into higher claims, reduced workforce productivity, and rising operating costs (National Commission on climate and workforce health).
All businesses face health-related financial risks from worsening air quality, extreme weather events, and community-level climate-driven disruptions. From heat-related productivity drops to wildfire smoke filling emergency rooms, climate-driven health impacts are imposing measurable and escalating costs on businesses, insurers, investors, and governments. For sectors reliant on outdoor, physical, or customerfacing labor such as manufacturing, agriculture, logistics and construction the exposure is particularly acute.
$820B+
Health and Wage Losses
Climate and fossil fuel related health impacts drive an annual $820 billion in U.S. healthcare costs and lost wages.(1)
2 x
Severe Weather
People in hardest-hit counties are 2–3× more likely to need emergency care after disasters compared to lessimpacted areas..
$100B+
Extreme Heat Costs
Extreme heat imposes an annual cost exceeding $100 billion on the U.S. economy, stemming from lost productivity and healthcare expenses.(2)
$350M+
Lyme Disease
> 476,000 Lyme disease cases are diagnosed each year in the U.S., costing society up to $968 million annually. (4)
79% Workers in self-insured plans
Among US firms with 500+ employees, 79% of covered workers are in selfinsured health plan. Climate-driven illness directly translates into escalating costs for employers.
What Investors Need to Know
• Climate-drive health costs are undeniable and already a material financial risk.
• It impacts workforce productivity, supply chains, and insured populations.
• While additional comprehensive economic analysis be beneficial, these costs are measurable and quantifiable.
The Regulatory Stakes
Financial risk assessments are increasingly becoming mandated. This has also led to a shift who is leading these efforts from largely being led by sustainability professionalsto bridging accountability to accounting/auditing. There has been a growth of financial risk frameworks and development of sector specific guidance. Additionally, risk management assessments are starting to evaluate stresstests under possible future climate models, yet none of these are currently testing the health shocks to financial system (extreme heat, wildfires, floods)
Overview on Climate Related Financial Risk Requirements
▪ California Senate Bill 261: Requires large companies doing business with California to disclose their climate-related financial risks and opportunities in a public report (reporting begins 2026).
▪ NY Department of Financial Services Climate Guidance: Mandates New York State-regulated banking and mortgage institutions to integrate climate-related financial risks into their governance, risk management, and business strategies.
▪ National Association of Insurance Commissioners: Updated Climate Risk Disclosure Survey, administered across 15 U.S. jurisdictions, representing approximately 80% of the U.S. insurance market, requiring all insurersto provide detailed information on their climate risk management and investment practices.
▪ European Union Corporate Sustainability Reporting Directive: Expands mandatory sustainability reporting for over 50,000 large EU companies, including comprehensive disclosure of environmental, social, and governance (ESG) impacts and risks.
▪ Basel Committee (2025): Expanded climate risk guidance for internationally active banks, focusing on enhancing supervisory oversight and risk management practices related to climate
Understanding Risk Frameworks & Regulations
Climate change is creating material financial risks acrossmultiple sectors. Ensuring there is a consistent way to measure and manage these risks has led to the rise of Climate Related Financial Risk frameworks. Global climate-related financial disclosure frameworks ranging from the Task Force on Climate-Related Financial Disclosures (TCFD) and its successor under the International Sustainability Standards Board (ISSB)—have reshaped how companies assessand disclose climate risks. These frameworks, alongside new state-level and sector-specific rules, form the backbone of corporate climate governance.
Key components of climate-related financial disclosure frameworks include:
Governance
Formalize organizational accountability for climate related financial risks
Risk Management
How will these risks be mitigated
Identify, assessand manage risks
Strategy
Identify existing and potential impacts of climate related risks and opportunities
Metrics/Targets
Establish metrics and targets to manage risks.
Climate Change is a Health Crisis
For most, climate change still evokes images of polar bears and melting ice caps. The reality is that climate change is the greatest threat to human health, according to the World Health Organization. Communities are feeling the impacts of climate change manifest through more frequent and intense extreme heat, worsening air quality, increased vector-borne diseases, and severe weather events. These climate-driven hazards translate into very real health challenges—from respiratory and cardiovascular illness to mental health impacts with significant financial consequences.
Over the past decade, the United States has faced more than 190 climate-related disasters, each exceeding $1 billion in damages for a total cost of $1.4 trillion (NOAA, 2024). While billion-dollar events capture headlines, the mounting toll of "smaller" floods, storms, and wildfires places sustained strain on communities, health systems, and corporate balance sheets. In 2024 alone, there were 108 federal declarations of Major Disasters and Emergencies equivalent to one every three days (IIED). Yet despite the hefty price tags, current financial analyses largely omit the health-related burden. These uncounted losses represent a critical blind spot: the financial cost of climate-related health impacts, from diminished workforce health and productivity to broader well-being (National Commission on Climate and Workforce Health).
More Frequent & Intense Extreme Heat
Rising temperatures lead to increased heatrelated illnesses (heat stroke, exhaustion) and exacerbate existing cardiovascular and respiratory conditions, especially in vulnerable populations. This can result in higher emergency room visits and healthcare costs.
Worsening Air Quality
Climate change contributes to higher levels of ground-level ozone and particulate matter from wildfires and pollution. This triggers asthma attacks, chronic obstructive pulmonary disease (COPD), and increases the risk of heart attacks and strokes.
Severe Weather Events
Hurricanes, floods, and droughts cause direct injuries and fatalities, displace communities, and disrupt access to healthcare, food, and clean water. The long-term mental health impacts, including PTSD, anxiety, and depression, are also profound.
Increased Vector-Borne Diseases
Changes in temperature and rainfall patterns expand the geographic range and breeding seasons of disease-carrying vectors like mosquitoes and ticks. This leads to a rise in illnesses such as Dengue fever, Zika virus, Lyme disease, and West Nile virus.
Where Current Frameworks Fall Short
One critical dimension remains underrepresented: human health. Current frameworks address "physical" and "transition" risks but rarely quantify the direct and indirect health costs of climate events such as extreme heat, wildfire smoke, flooding-related mold exposure, and vector-borne diseases—despite mounting evidence of their material financial impact. While the effects of climate change's impact on health is understudied, there is already a wealth of data supporting the direct links between climate change and health. Excluding the associated costs creates a financial risk blind spot.
1 Fragmented Risk Assessment
Health risks are fragmented across categories and often not clearly labeled or systematically assessed.
3 Long-term Impacts Ignored
Long-term health system impacts (e.g., chronic disease burdens from worsening air quality, mental health crises from displacement) are overlooked.
2 Vulnerable Populations Overlooked
Vulnerable populations (e.g., elderly, lowincome, outdoor workers) are rarely highlighted, despite disproportionate risk.
4 Missed Adaptation Opportunities
Synergies with adaptation/resilience efforts are under explored (e.g., investments in green infrastructure that reduce heat and improve health.
For capital markets, excluding health costs from climate risk assessments leads to systematic underpricing of risk. Without integrating workforce health impacts into disclosures,investors lack a full picture of operational resilience, long-term value, and exposure to stranded assets in vulnerable regions. Similarly, regulators are signaling that climate disclosures must capture material financial risks. Omitting health ignores a rapidly escalating driver of costs, litigation, and reputational exposure.
Examples of unaccounted costs to businesses include:
• Emergency department visits during heatwaves and wildfire smoke events
• Short and long-term care for respiratory or cardiovascular conditions exacerbated by climate hazards
• Mental health treatment for trauma, anxiety, and depression following disasters
These costs are real, recurring, and when aggregated can rival or exceed the better-tracked property and infrastructure losses.
An Overview: Climate-Driven Health Risk Categories
To make climate disclosures truly comprehensive, a structured framework for health is needed. This approach organizes risks into clear categories that are proposed to be added to existing risk frameworks for health risk to be adequately considered physical, health system, workforce, and liability making them visible, measurable, and actionable for decision-makersacross sectors.
Population Health Impact
Physical and Mental Risks to Health
• Heat-relatedillness and mortality (particularly outdoorworkers, elderly, and children)
• Air pollutionimpacts (e.g., wildfire smoke, ground-levelozone)
• Spread of vector-bornediseases (e.g., dengue, malaria, Lyme disease)
• Water- and food-borne illnessesfrom floodingor infrastructure failure
• Mentalhealth impacts from trauma, displacement, and chronic stress
Operational Continuity
Liability and Reputational Risks
• Failureto safeguardemployees, customers, or communitiesfrom known hazards
• Investorconcern over incomplete or absent disclosure of health-relatedrisks
• Gaps in coverage for disproportionately affected populations
Health System and Infrastructure Risks
• Capacity strain from extreme weather events or climate-linkedpandemics
• Supply chain disruptionsfor medicines, equipment, and care delivery
• Rising cooling demandand risks to electricity access for vulnerable populations
Systemic Capacity
Business and Workforce Risks
• Occupationalhealth threatsfrom heat, pollution, and disasterresponse
• Lost productivity from illness or injury linked to climate impacts
• Escalatinghealth insurance premiumsand self-insuredcosts
Financial & Legal Outcomes
By embedding health explicitly into financial risk frameworks, businesses and investors can gain a sharper view of vulnerabilities and a more actionable basis for capital allocation, insurance design, and adaptation planning. Doing so not only strengthens resilience but also positions first movers as leaders in a space where regulatory and market expectations for financial risk accounting are accelerating.
Unaccounted Health Costs by Stakeholder
Climate-driven health impacts impose substantial financial burdens on employers, impacting their bottom line through both direct and indirect pathways. While direct costs involve immediate financial outlays, indirect costs often stem from broader strains on the healthcare system and subsequent disruptions to workforce productivity and operations, all triggered by climate events and their associated health crises.
Business Costs
Higher employer health claims: Increased expenses for treating climate-related illnesses through employer-sponsored health plans
Worker comp and disability payouts: Payments to employees who suffer climate-related injuries or illnesses on the job
Business disruption driven by absenteeism: Lost revenue and operational challenges from employee absences due to climate-driven illness
Liability from lawsuits and regulatory action: Legal costs from failure to protect employees from known climate hazards
Healthcare System Costs
Strain on public health services: Increased costs for emergency response,public health campaigns, and medical infrastructure during climate crises.
Elevated public healthcare expenditures: Ongoing medical care costs for chronic conditions exacerbated by climate impacts, often absorbed by public health systems.
Mental health crisis & support services: Increased demand and costs for mental health services, including those for trauma and anxiety resulting from climate disasters.
Community & Societal Costs
Socio-economic disruption & lost productivity: Broader economic losses due to community displacement, damaged public infrastructure, and reduced overall productivity.
Disproportionate impacts on vulnerable populations: Higher costs for social support and emergency relief for disadvantaged communities with fewer resourcesto adapt.
Governmental Costs
Public health response costs: Expenses for establishing and operating cooling centers, shelters, and disease surveillance systems.
Disaster relief & emergency deployments: Costs associated with immediate response efforts, including emergency medical services, aid distribution, and personnel deployment.
Medicaid/Medicare burden: Increased healthcare expenditures for vulnerable groups covered by public health programs due to climate-exacerbated health conditions.
All these costs, whether direct or indirect, ultimately impact the employer, affecting financial performance, operational stability, and workforce well-being. Yet they remain largely invisible in current climate risk frameworks.
Connecting the Dots - Risks to Costs
The health-related risks we’ve outlined are not theoretical they translate into real financial and operational impacts. Heat illness, wildfire smoke, and severe weather strain health systems, reduce workforce capacity, disrupt operations, and increase both insurance and public expenditures. These costs cascade across stakeholders: employers face higher claims and lost productivity, health systems absorb surge and chronic care costs, communities experience disruption, and governments carry growing fiscal burdens.
In short, climate-driven health impacts create a cause-and-effect chain: risks to people become risks to performance, resilience, and long-term value. Recognizing this link is essential for executives, investors, and policymakers seeking to price risk accurately, fulfill fiduciary obligations, and protect both financial stability and societal well-being.
Climate-driven health risks are immediate, systemic, and costly — turning risks to people into escalating financial exposures that leaders have a duty to prevent.
Risk Category Examples of Risks
Physical & Mental Health Risks
Health System & Infrastructure Risks
Heat stroke, cardiovascularstress, asthma/COPD flare-ups,vector-borne diseases, trauma & PTSD from disasters
Hospital surge capacity strain, disruptedcare delivery, medicine/equipmentshortages, power/coolingfailures
Business & WorkforceRisks
Liability& ReputationalRisks
Lost productivity,absenteeism, occupationalhealth threats, rising insurance premiums/self-insuredcosts
Business Costs: higher employer health claims; workers’ comp & disabilitypayouts
HealthcareSystem Costs: elevated emergency & chronic care expenditures; increaseddemand for mental health services
HealthcareSystem Costs: strainon public health services; elevated public healthcare expenditures
GovernmentalCosts: Medicaid/Medicare burden;disaster response expenses
Business Costs: absenteeism-driven disruption; higher employer claims; liability from lawsuits
Community Costs: socio-economic disruption& lost productivity
Business Costs: liability from lawsuits/regulatory action
Litigationfor failingto safeguard workers/customers, investorpressure on disclosure gaps, inequitable impacts
Governmental& Community Costs: increasedsocial support spending; reputationalrisk loweringinvestor confidence
How to Include Climate-Driven Health in Financial Risk Assessment
Standard frameworks already offer a comprehensive approach for leaders to quantify, disclose,and manage climate-related risks
Governance
Formalize organizational accountability for climate related financial risks
Risk Management
How will these risks be mitigated
Identify, assessand manage risks
Strategy
Identify existing and potential impacts of climate related risks and opportunities
Metrics/Targets
Establish metrics and targets to manage risks.
Integrating climate-driven health impacts into this structure allows risk managers to translate health exposures into financial terms that leaders can act on through strategy, governance, and disclosure.
Hazard & Exposure Mapping
Identify climate hazards across your operational footprint by overlaying:
• Climate data from NOAA, EPA, and CDC resources
• Health vulnerability indices (Social Vulnerability Index)
• Heat vulnerability maps and extreme weather patterns
Financial Translation
Link health costs to financial line items:
• Opex: Medical benefits, overtime, hazard pay
• Capex: Facility upgrades, climate-resilient retrofits
• Revenue: Service downtime, deferred sales
• Balance Sheet: Asset impairment, insurance reserves
Health Impact Quantification
Calculate potential health burdens using:
• Epidemiologicalcoefficients (e.g., ED visits per degree above threshold)
• Event-driven and chronic health impact estimates
• Cost projections from claims data and productivity metrics
Disclosure Integration
Incorporate findings into risk disclosures under:
• Physical risk (acute & chronic health impacts)
• Transition risk (adaptation costs -Opex, Capex, Insurance costs)
• Liability risk (health-related litigation or non-compliance)
Climate-Driven Health Risk Model Overview
Key Health Impacts
• Heat stroke & heat exhaustion
• Cardiovascular stress & kidney disease flare-ups
• Increased mortality, especially among elderly & outdoor workers
• Traumatic injuries & deaths (floods, hurricanes, tornadoes)
• Disruption of medical care (dialysis, medications, hospital access)
• Mental health impacts (PTSD, anxiety, depression)
Risks
• Respiratory illness (asthma, COPD exacerbations)
• Cardiovascular events (heart attacks, arrhythmias)
• Increased hospitalizations & premature deaths
Physical and Mental Health System and Infrastructure Risks Liability and Reputational Risks Business and Workforce Risks
• Lyme disease (ticks)
• West Nile & dengue fever (mosquitoes)
• Expansion of disease ranges due to warming climate
Key Takeaways
Climate-driven health impacts represent material financial risks
From the $32.2 billion in health costs from California wildfires to the $100+ billion annual impact of extreme heat, these costs directly affect corporate bottom lines.
Current frameworks create a financial risk blind spot
By excluding health costs from climate risk assessments, investors and companies are systematically underpricing risk and missing adaptation opportunities.
Integrating health strengthens resilience and disclosure quality
The next generation of climaterelated financial risk management must move beyond property and supply chains to fully include human health as a material exposure.
By embeddinghealth explicitly into financialrisk frameworks,businessesand investorscan gain a sharper view of vulnerabilitiesand a more actionable basis for capital allocation,insurancedesign, and adaptation planning.
Taking Action
Corporations, investors and policymakersmust act now to incorporate health dimensions into climate risk assessment and disclosure practices to accurately price risk, plan for resilience, and protect financial stability and human well-being in a changing climate.
In addition to cross functional teams that typically provide input to risk disclosures, engage additional stakeholders for data on climate-related health risks and costs:
• Occupational health and safety, industrial hygienists, Human Resources/Benefits, Workers Compensation for data on health exposures and costs including productivity costs
• Facilities, Real Estate, Operations for risks related to climate-related physicalimpacts with health consequences (e.g. extreme heat, storms, wildfires)
• Health plans/Insurers for claims data and coverage gaps
• Healthcare provider to translate climate hazards into potential health outcomes
Risks, Caveats & Management Approaches Managing climate-related financial risks involves navigating data limitations and uncertainties, particularly around attributing specific health impacts to climate factors. It is important to clearly acknowledge these uncertainties and adopt conservative assumptions, while complementing quantitative data with qualitative disclosures on governance and risk oversight.
Path Forward: Closing the Health Blind Spot in Financial Risk
The evidenceis clear: climate change’s health impacts create material financialrisks that extendfar beyond healthcare systems. They affect employers throughrisingclaims and lost productivity,insurersthroughescalating payouts, governmentsthroughstrainedbudgets, and investors throughunderpricedexposures.At a macroeconomic level, climate-drivenhealth burdensamplify inflationary pressures, depresslabor participation, and drag on GDP cascadingsystemic risks that the financialsector can no longer afford to ignore.
Addressing this blind spot requires moving from gap identification to action. The next phase of development for researchers, practitioners, and policymakers should focus on:
Standardized Metrics & Data Integration
1
Advance methods that link health impacts (e.g., ER visits, absenteeism, chronic disease costs) to financial line items across Opex, Capex, revenue, and balance sheet exposures. This involves developing robust, verifiable data sets and reporting standards specific to climate-health financial impacts.
Health Stress Testing & Scenario Analysis
2
3
Expand financial stress tests to include climate-related health shocks such as heat waves, wildfire smoke events, and vector-borne disease outbreaks alongside physical and transition risks. These scenarios should model both acute and chronic health burdens on workforces and communities.
Adaptation & Prevention Investments
Scale workforce protections, resilient infrastructure, and insurance models that reduce foreseeable harms, creating measurable financial savings and health benefits. This includes investing in early warning systems, air purification, cooling centers, and climate-smart healthcare facilities.
Fiduciary Duty & Governance
4
5
Frame climate-health as both a fiduciary and moral obligation. Investors, boards, and employers have a responsibility not only to price risks but to prevent harms, embedding accountability into governance, risk management, and disclosure. This requires clear leadership and executive oversight.
Cross-Sector Pilots & Case Studies
Support demonstration projects where employers, insurers, and communities quantify and disclose health-related climate costs, creating replicable models for broader adoption. Documenting successful interventions and their financial returns will accelerate widespread implementation.
Taken together, these steps provide a roadmap for embedding health into climate-related financial risk frameworks. Doing so will not only align with evolving disclosure requirements but also unlock new strategies for resilience, innovation, and value creation.
Organizations that lead in this space will not only fulfill their fiduciary obligations but also strengthen their social license to operate, positioning themselves as credible stewards of both human and financial capital in a warming world.
Appendix
Case Study: The Tubbs Fire
In the 48 hours beginning late on October 8, 2017, 172 wildfires started in Northern California. Of the fast-moving conflagrations the largest was the Tubbs Fire. It jumped a sixlane highway and impacted residential and commercial areas in the City of Santa Rosa including two hospitals. The Kaiser Permanente Medical Center and the Sutter Santa Rosa Regional Hospital both safely evacuated all patients and staff. The terrible impact to the community included 44 lives lost and 8,900 structures destroyed including homes of more than 200 hospital physicians and staff.
The hospitals were closed until supplies could be replaced and smoke damage was repaired, meaning that the community had to obtain health care services elsewhere during a time of high need. In 2019, another wildfire occurred in the same area and the hospitals once again had to evacuate.
While the impacts were severe—the health-related financial costs extend far beyond the fire perimeter. An analysis of the California 2018 wildfires found that 22% of total damages ($32.2 billion) were attributable to health costs, largely from smoke-related air pollution and associated hospitalizations(Wang et al).
If similar proportions are applied to the Tubbs Fire's estimated economic losses, the health burden alone would likely be in the billions, reflecting increased healthcare utilization, reduced workforce productivity, and long-term respiratory and cardiovascular impacts.
Respiratory ER Visit Increase
At Kaiser Permanente Santa Rosa Medical Center, emergency room visits for respiratory problems jumped by 570, or 37 percent, from January through March 2018 compared with the same period in 2017.
Hospital Reporting Health Impact
Seven of nine hospitals in Napa and Sonoma counties reported either significantly or slightly more cardiovascular and respiratory cases from January through March 2018compared with the same period in 2016and 2017.
Financial Impact Attribution
Of the total economic damages from California wildfires, 22%were attributable to health costs, demonstrating the substantial financial burden of climate-driven health impacts that often goes uncounted in risk assessments.
Coffey Park, Santa Rosa (2017) Credit: California National GuardCopyright: Public Domain
Appendix - Sample Climate & Human Health Disclosure
Overview:
Climate change is increasinglyrecognizedas a public health threat.As part of our climate risk and opportunity assessment, we evaluatedthe potentialdirect and indirecthealth impacts relevantto our operations,workforce, customers,and communities.
Key Identified Risks:
• Elevated risk of heatstroke and heat stressamong frontlineworkers
• Poor air quality affectingemployee health and attendance
• Increaseddisease vector prevalence in regions where we operate
• Disruptionof healthcare supply chains and infrastructure
Adaptive Measures:
• Implementingheat protectionstandardsacross all operationalsites
• Equippingoffices with air purificationand real-time air quality monitoring
• Employee educationcampaigns on climate-healthpreparedness
• Health-focusedESG investmentsand supplier due diligence
Metrics: Indicator
% of workers in heat-stress zones with adaptive PPE
# of heat-related sick leave days
% of healthcare facilities with updated climate resilience plans
Additional Recommended Metrics:
1
Healthcare System Metrics
• Emergency departmentvisits duringheatwaves
• Hospitalizationsfrom asthma duringsmoke events
• Integratingclimate vulnerabilitydata into CHNAs
• Investingin resilientenergy and water systems
2
Workforce Health Metrics
• Climate-relatedabsenteeismrates
• Heat adaptationtrainingcompletion
• Air quality-relatedproductivityimpacts
• Mentalhealth support utilizationduring
• climate events
The next generation of climate-related financial risk management must move beyond property and supply chains to fully include human health as a material exposure. Doing so will not only close a major blind spot in current risk frameworks but also unlock new strategies for protecting people, performance, and long-term enterprise value.
Evidence Base: Climate-Health Cost References
Theme Title
Heat
Heat
Heat
Storms
Air Quality
Infectious Disease
Journal / Source Key Takeaway
Future heat stress to reduce purchasing power PLOS ONE (2021)
Occupational heat stress, heat-related effects and the economic burden
Impact of U.S. labor productivity losses from extreme heat
Environment al Research (2023, PMC)
FRBSF Economic Letter (2024)
Social media usage reveals recovery of small businesses after disasters Nature Communicati ons (2020)
Impact of air quality on enterprise productivity
Climate change and infectious disease: a review of evidence
Frontiers in Environment al Science (2023)
Infectious Diseases of Poverty (2023)
Projects labor productivity and output losses from rising heat stress.
Reviews evidence on productivity loss, compensation, and healthcare costs from heat.
Quantifies productivity, capital, and consumption losses from extreme heat.
Small businesses take weeks–months to recover, losing substantial revenue post-disaster.
Shows worse air quality reduces firm productivity via labor and R&D capacity.
Reviews climatelinked vector disease risks (Lyme, West Nile, dengue) and economic impacts.
Global GDP losses up to 4% by 2100; billions annually in U.S.
$100B+ annual labor productivity losses in U.S. by mid-century
0.5–1% annual U.S. GDP losses by 2050
Katrina: billions in small business losses
PM2.5 linked to 2–6% productivity reduction
$3B+ annually in U.S. health and productivity costs
Evidence Base: Climate-Health Cost References
Theme Title
Occupational / Various Updated assessment of occupational safety & health hazards from climate change
Various Health Risks and Costs of Climate Variability and Change
Journal / Source Key Takeaway Estimated
J Occup & Environ Hygiene / PMC (2023)
National Library of Medicine
Reviews occupational risks including vector disease and employer cost implications. Rising employer health claims and absenteeism costs
Broad overview of climate-health cost linkages. Not specified
Other
Other
Other
GDP losses via reduced worker productivity
Nature Communication s (2021)
Heat waves disrupt supply chains Nature (2024)
Climate Change in 2018: Implications for Business
Harvard Business School (2018)
Shows private sectors (construction, manufacturing, agriculture) most affected.
Substantial employer burden
Heat waves amplify supply chain disruptions and costs. Multi-sector financial impacts
Reviews overall business costs, with sector-specific implications. Not quantified; private sector impacts detailed
Evidence Base: Climate-Health Insurance Cost References
Theme Title Source
Key Takeaway
Financial Impact
Extreme Heat & Air Quality
Life & Health Insurance Risk
Extreme Heat and Air Quality: Impacts on Healthcare Utilization in California Milliman
Chronic Disease & Heat
Climate Risk Analysis for Life and Health Insurers Society of Actuaries
Climate Change’s Impacts on Life & Health Insurance Nomura Research Institute
Liability & Disclosure
Systemic / Macro Risks
The Impact of Climate Change on Life and Health Insurers PwC
Global Insurance Market Report –Climate Change Edition IAIS
Heat and poor air quality drive higher ER visits and hospital utilization. Increased employer health claims, emergency costs, and public payer spending.
Life & health insurers face morbidity, mortality, and disability shocks from climate hazards.
Climate change drives chronic disease burdens (e.g., kidney health, heat-related illness).
Rising health claims, underwriting losses, and reserve pressures.
Long-term care costs, productivity losses, increased insurer claims.
Climate risks create disclosure gaps, liability exposures, and investor concern. Escalating claims, liability costs, reputational risk.
Climate health risks ripple through economies, affecting insurers’ assets and liabilities. Inflationary pressures, GDP drag, budget strain, pension fund exposure.