Understanding Physical Climate Risks: Heat stress

Heat stress is often reduced to heatwaves. It shouldn’t be. In this second episode of Understanding Physical Climate Risks, we look beyond extreme events to explore the slow, persistent consequences of rising temperatures on our economies and daily lives. Like the proverbial frog in boiling water, we tend to overlook gradual climate shifts until the damage is done.

The paper examines how chronic temperature shifts are already reshaping four key areas: energy consumption, agriculture and food production, worker productivity, and tourism. It explains why regional warming disparities matter and how the same temperature increase can have vastly different impacts depending on the sector, the location, and the specific vulnerabilities of each activity.

It also highlights practical implications for investors and corporates, from understanding sector-specific temperature thresholds to asset-level exposure analysis. The paper outlines a multi-level adaptation strategy, combining short-term operational protocols with long-term infrastructure planning, to build lasting resilience.

This publication is the second of a six-part series dedicated to major physical climate risks. Over the course of this year, we will release additional episodes covering other key hazards to support more structured and informed climate risk management.

If you want to understand how chronic heat stress can impact your assets and portfolios, and what you can do about it, download the paper below!