From impacts of weather & climate to the bottom line

Below are a few examples to show how climate change can directly affect an SMEs’ bottom line. UKCIP’s Business Areas Climate Impacts Assessment Tool (BACLIAT) can be used to carry out a simple scoping exercise on a business or business sector.

Impacts	Business consequences	The bottom line
Excessive internal temperatures	Server failure Business interruption Impact on reputation	Drop in productivity Potential lost sales Impact on future sales
	Uncomfortable working conditions	Drop in productivity
	Increased cooling or refrigeration required	Increased overheads through higher energy costs in summer
	Potential for regulation on upper temperature limit	Fine or cost of litigation if requirement not met
Milder winter temperatures	Reduced need for winter heating	Lower overheads through reduced heating costs
Flooding of manufacturing premises	Loss of access for deliveries Business interruption Impact on reputation	Drop in productivity Potential lost sales Impact on future sales
Flooding of high street	Customers cannot access shops and services	Lost sales
Fewer people go shopping in stormy weather or heatwaves	Fewer customers in high street shops and services	Lost sales
Water shortages	Increased water rates Not water for cooling Business interruption	Increased raw material costs Drop in productivity Potential lost sales
Extreme weather causes transport disruption	Staff encounter travel difficulties Customers encounter travel difficulties	Drop in productivity Lost sales
Extreme weather can result in difficult outdoor working environment e.g. for construction or agriculture	Business disruption Failure to complete job on time Impact on reputation	Drop in productivity Financial penalty Impact on future sales
Global changes, such as increased frequency of tropical storms will disrupt international manufacturing interests	Disruption to supply chain of key component Business interruption	Drop in productivity Potential lost sales
Impacts on agriculture or extraction activities	Increase in raw material prices	Increased raw material costs
Impacts on agriculture or extraction activities	Climate becomes better suited to certain crops	Increased productivity
New tastes in clothes, food and leisure time pursuits in the new climate	Increased/ decreased demand for certain goods and services	Increase or decrease in sales