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Climate change and employee health and benefits: Time for action

Employers have underestimated climate change’s impact on workforce health & well-being.

16/07/2024 · 5 minute read

For decades, employers have underestimated the impact climate change can have on the health and well-being of the workforce. This needs to change — and quickly. Extreme weather events can have potentially catastrophic health effects on employees and their families, particularly the most disadvantaged groups of workers who most need support.

Aligning benefits with climate agenda

Employers should align their benefits programmes with the climate agenda not only to support employees but to gain a competitive advantage. Failing to do so is likely to result in greater business continuity disruption, increased absenteeism, decreased productivity and elevated healthcare costs.

The past 20 years have seen a staggering increase in extreme weather events and climate-related disasters. Research published by the UN Office for Disaster Risk Reduction shows that incidents of drought, extreme heat, storms, landslides, wildfires and floods have all grown sharply since the year 2000 and are set to rise further unless action is taken to reduce greenhouse gas emissions and bring down global temperatures.1

Employers recognise these climate events as a grave threat to resources, buildings and infrastructure, yet they are just beginning to acknowledge the impact on the health and well-being of their workforces. According to our People Risk 2024 report, natural disasters and extreme weather ranked 14th in a list of 25 potential people risks facing organisations.2

Extreme weather events can affect people’s health and well-being in different ways.

Some effects are direct — for example, extreme heat has been found to aggravate asthma and other respiratory diseases and increase the risk of fatal heart attacks, strokes and arrhythmias.3, 4

Other impacts are indirect. For example, people living in areas that are becoming increasingly prone to flooding or wildfires are finding it harder to purchase sufficient home insurance.5 Meanwhile, floods, landslides and wildfires can all affect access to healthcare by disrupting medicine supply chains and destroying transportation and other infrastructure, leaving people isolated. And the existential threat of climate change has been linked to heightened levels of anxiety, stress and depression.6

Disadvantaged groups at greatest risk

The workers facing the greatest threat from climate events are often among the most disadvantaged groups within the workforce, such as construction workers in extreme heat, bicycle couriers making deliveries through torrential storms and assembly line workers operating machines in hot factories with no air conditioning. And these groups of typically lower income, part-time employees generally have little access to healthcare benefits through their employers according to our Health on Demand research.7

More than ever, organisations should provide these more vulnerable workers with access to healthcare supports. Not only will this help to ensure these groups are able to remain healthy and productive at work, but it will also have a stabilising effect across the workforce as benefits programmes become more equitable.

Offering a full benefits package to all employees may not be financially viable for every organisation, but there are steps employers can take to help bring parity and, at the same time, align their benefits strategies with the climate agenda. The key is to consider in practical terms the benefits employees may need to support their own and their families’ well-being in the face of catastrophic climate events.

For example, this may involve extending paid sick leave to all staff or expanding on-site health services, especially for mental health support. It might also include offering employer-funded telemedicine and other digital health solutions to improve access should local systems become compromised.

There may also be specific actions employers can take to address employees’ particular health risks. For example, in regions affected by increases in infectious disease, such as mosquito-borne illnesses, employers could consider rolling out vaccination programmes for staff. Others may need to determine whether wearables could be used to support safety in the event of extreme heat at worksites or whether they need to deploy heat-stress-monitoring technology at facilities that cannot be fitted with cooling systems. And HR and risk managers should work together on scenario planning to implement flexible working backup plans should employees be unable to get into work or in the event that schools are unable to open.

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Managing environmental risks as people risks

The reality is that environmental, sustainability and protection risks will continue to grow in the coming years. Employers need to recognise that these climate-change-related risks are people risks.8 By bringing affordable, accessible healthcare within reach of every employee — particularly those at greatest risk from extreme weather events — organisations will be better equipped to meet their business goals while supporting society as a whole.

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1 United Nations Office for Disaster Risk Reduction. The Human Cost of Disasters: An Overview of the Last 20 Years (2000–2019), 2020, available at https://www.undrr.org/publication/human-cost-disasters-overview-last-20-years-2000-2019.

2 Mercer Marsh Benefits. People Risk 2024, available at https://www.mercer.com/insights/people-strategy/people-risks-and-business-resilience/people-risk-management/ and https://www.marsh.com/en/risks/people-risk/insights/the-five-pillars-of-people-risk.html.

3 McCormack MC et al. “Respiratory Effects of Indoor Heat and the Interaction with Air Pollution in Chronic Obstructive Pulmonary Disease,” Annals of the American Thoracic Society, Volume 13, Issue 12 (2016), pp. 2125–2131, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5291496/.

4 Wittenberg A and E&E News. “Heart Attacks and Strokes Will Rise with Extreme Heat,” Scientific American, October 31, 2023, available at https://www.scientificamerican.com/article/heart-attacks-and-strokes-will-rise-with-extreme-heat/.

5 Mercer Marsh Benefits. People Risk 2024.

6 Dodds J. “The Psychology of Climate Anxiety,” BJPsych Bulletin, Volume 45, Issue 4 (2021), pp. 222–226, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8499625/.

7 Mercer Marsh Benefits. Health on Demand, 2024, available at https://www.mercer.com/insights/total-rewards/employee-benefits-strategy/health-on-demand-2023-survey-report/ and https://www.marsh.com/en/services/employee-health-benefits/insights/health-on-demand.html.

8 Mercer Marsh Benefits. People Risk 2024.

About the authors:

Diana Bulla

Diana Victoria Bulla

Workforce Health Coordinator, Latin America and Caribbean

  • Colombia

Ashutosh Jhunjhunwala

Ashutosh Jhunjhunwala

Advisory Leader, India, Mercer Marsh Benefits

  • India

Key Solutions

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Environmental social governance

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Employee health & benefits

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