Climate Change is Also Having an Impact on Everyday Health and Wellbeing

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March 2, 2022


It’s common to think about the impact of climate change as the physical damage and loss due to severe weather events and environmental disruptions. But climate change is affecting another important area of our lives: health and wellbeing.

According to Aon’s new 2021 Weather, Climate and Catastrophe Insight report, natural disasters caused $343 billion in economic losses worldwide in 2021, the seventh-costliest disaster year on record. Included in that total are 50 events that each caused losses of $1 billion or more. The share of the year’s economic losses caused solely by weather and climate-related events totaled $328 billion.

As striking as this economic toll is, it doesn’t tell the full story of the effects of climate change. Severe weather and climate events also have a significant impact on our health and wellbeing through, for example, the related spread of disease, the disruption of food supplies and the damage to mental health.

In Depth

The costliest climate and catastrophe events of 2021 were in the U.S., where $167 billion in economic losses were 93 percent above the 21st century average. At least 23 individual events in the U.S. caused economic losses of $1 billion or more in 2021.

Natural disaster losses were a worldwide phenomenon, however. Global economic losses from natural disasters were 27 percent above the 21st century average in 2021. Germany, Belgium, Luxembourg, Austria and China all experienced their costliest insurance industry events on record last year.

Among those widespread losses, individuals have experienced great personal hardship in the wake of natural disasters and climate change.

“As we think about climate change — extreme weather events come immediately to mind as they are more perceptible, however, when we take a wider look we clearly see how climate change affects health,” says Avneet Kaur, head of the Advisory and Specialty Practice, Health Solutions EMEA, at Aon.

The Growing Health Risks of Climate Change

A recent World Health Organization analysis found that, prior to the COVID-19 pandemic, 12.7 percent of the world’s population — nearly 930 million people — spent at least 10 percent of their household budget on healthcare. Climate change will likely contribute to the anticipated growth in those health expenditures — and the financial concerns of covering the cost of healthcare.

The health risks from climate-related events are varied and numerous. Changes in climatic conditions such as air pollution, erratic weather patterns, extreme heat, floods, smoke from wildfires etc. can influence the spread of food-, insect- or water-borne diseases and give rise to chronic conditions such as cardiovascular and respiratory illnesses or even cancers. On top of this, large-scale natural disasters — or living in an area at risk of such perils — can also have an impact on mental health.

The health casualties of many of these climate change-related events vary by the geography or economic maturity of countries. The ramifications would also be felt more by the vulnerable, women and children, low-income workers, frontline workers and people in developing markets. But since we live in such a connected world, these ramifications could quite easily have global impacts.

“Impact of climate change on health is less than straightforward, as global ecosystems are very inter-dependent” says Kaur. “Health impacts could really create challenges for supply chains, and both product and service outsourcing models.”

Damage to Mental Health and Wellbeing

Medical care accounts for only 10 – 20 percent of modifiable health factors, while the majority is driven by wider determinants with climate change impacting several aspects of the wider determinants of health and wellbeing. These impacts could be both insidious and catastrophic in nature, giving rise to a wide variety of health and wellbeing issues.

Our environments are increasingly marked by record-breaking natural disasters: In 2021, Louisiana became the first U.S. state to experience back-to-back years of a 150-mph hurricane making landfall. By the end of this century, individuals living in many regions around the world will spend most of their years exposed to deadly climatic conditions — more than 300 days a year in some areas. The stress of living with growing exposure to extreme weather events or experiencing natural disasters will have an impact on mental health.

What Employers Can Do

There are a number of steps employers can take to help address the health impacts of climate change. “Businesses usually have insurance in place to cover property losses from catastrophic events,” says Kaur. “But when it comes to employee health — imagine a flood. You would need physical or emotional trauma management help lines, and services, to provide support for your employees and their families. These employee support systems could kick-in immediately with a catastrophic event. Not a lot of companies are doing that yet.”

Organizations also can introduce training for leaders and managers on how to support employees in the wake of major disasters. Businesses can provide resources such as employee assistance plans to workers and their families suffering from stress, anxiety and depression.

Employers can also look at their own business operations and consider their impact on climate, the global community and marginalized populations in particular, Kaur says. “Start educating employees about impacts of climate change, and how their personal and professional actions can make a difference.”

Tackling Climate Change Risks is a Shared Endeavor

To address the scale of the health implications of climate change — as well as the risks to property, infrastructure, supply chains and other exposures — private and public sectors will need to work together.

But, for employers confronting the daunting scope of the climate change crisis, Kaur offers advice on next steps.
“Employers need to start by focusing on their own businesses,” Kaur says. “focus on the areas you can control, view your working practices, your procurement practices through a global ESG lens. There’s a lot that can be done, but it will take sincere commitment from all stakeholders.”