Small Business Disproportionally Impacted By Global Warming

February 16, 2014
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Small busineses are more vulnerable to weather related risk

Weather events 2014 have grounded millions of people around the country like so many naughty teenagers. Many of us sit inside (if lucky) looking out on a hostile world lacking electric, water, heat and internet knowing it is temporary, but miserable none-the-less. Others are seing permenant drout and an accompanying 12 month wildfire season. Europe is experiencing record flooding. While these weather events are temporary, they are reoccuring with suficent frequeny that they can no longer be disnissed as "one offs". The NY Times covers the "news" of the events. However the impact of weather events is impacting small business in a prolonged and repeated way.

How can small businesses plan and position thenselves to mitigate the impacts of extreme weather?


According to the Small Business Administration

  • Small businesses account of 54% of all US sales
  • Franchised US small businesses account for 40% of all retail sales and jobs provided (>8 million people)
  • As corporate America downsizes, small start-ups have grown

Gail Reid's earlier blog on freelance work discussed the expectation that those jobs will account for 50% of the market in 2020. Small businesses drive the economy.


Yet the impact of global warming and extreme weather events are harsh on small business. The Hartford Company reports that 25% of small and mid-sized companies do not reopen after a major disaster and the median cost of downtime for an extreme weather event for a small business is $3,000 a day. Small businesses are vulnerable to extreme weather through lack of planning, resources, capital and depth of infrastructure.


Direct damage from extreme weather events impact small business more severely. The lack of communications, electricity, supply chain interruptions cannot be recuperated in other locations or times. Increasing insurance costs that result from weather events are hard to absorb when the bottom line has been strained by original disaster.


Human capital is often most seveerly taxed. Few small business have an employee safety net. Employees can suffer lasting economic damage as the result of a single weather event. We all see hourly or freelance workers who could not get to their jobs and have no income on the days they did not work.


All of these points argue for small businesess to include strategic discussions about the impacts of extreme weather events in their thinking. There are going to be rising costs identified by major financial media outlets from these extreme weather events. Small business owners will have to band together and engage their local communities, business organizations and governmental agencies to forge solutions. Perparation for, reduction of the risk of and mitigation of the impact of exterme weather can no longer be ignored. The next time you are grounded by a weather event consider the American Sustainable Business Council's  climate change preparedness for small business. Or better yet - just read it now.



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