Too hot to handle? Building resilience to extreme heat in the private sector

Extreme heat is a chronic, interconnected and escalating emerging risk that poses significant challenges to public health, infrastructure and economic stability. Understanding the effects of extreme heat and developing strategies to build resilience can benefit organizations, businesses and society as a whole. By systematically observing and addressing this risk, we can enhance collective preparedness, protect vital assets, and promote sustainable development for the well-being of communities and the economy at large.

As global temperatures continue to rise, extreme heat is emerging as a significant and chronic risk that poses a threat to human health, worker productivity, educational outcomes, utilities, transportation networks and political stability, among other concerns.  

More than 70 per cent of the world’s population – about 2.4 billion people – is now at risk from extreme heat, according to research by the International Labour Organization. The most vulnerable communities are often the hardest hit, it says. 

In addition to the interconnected risks, extreme heat directly and indirectly causes or contributes to, extreme heat can amplify the likelihood, frequency and intensity of other natural perils, like wildfire and flood. 

Highlighted in the 2025 AXA Future Risks Report as a growing concern, the importance of extreme heat was further noted by the Copernicus Climate Centre, which stated that 2024 was the hottest year on record globally, with 76 heatwaves across 90 countries between June 2023 and April 2024. 

Gaining a better understanding of emerging risks, such as extreme heat, allows us to gather insights about the effects they will have on businesses, and the insurance coverage they will likely need in future. It also allows us to understand how these risks will affect colleagues, operations and societies across the world. 

Working with experts across AXA XL, the wider AXA group, the risk and insurance industry, and specific topic experts in the scientific community, we are seeking to develop ways to help society to build resilience against emerging threats. 

What is extreme heat?  

Extreme heat is usually considered to be temperatures above 32°C for two days or more, or 3.2°C above the usual highest temperature for the area in question at that period of time. 

A heatwave is defined as a “prolonged period of exceptionally high temperatures, both during day and night, that can cause significant risks.” Those risks arise from three key factors: 

• Intensity, which can lead to infrastructure damage, environmental harm and heat-related illnesses. 
• Duration, which can increase the risk of exhaustion, accidents and stress, among other things. 
• Humidity, which can exacerbate the effects of extreme heat, making conditions feel hotter and potentially making health conditions worse. 

Effects of extreme heat  

Extreme heat has various significant and often interconnected impacts. It can negatively affect natural resources by causing droughts, water shortages and poor air quality. A phase of drought conditions, for example, may result in vegetation drying out, elevating the risk of fire. In turn, wildfires often result in nature and biodiversity loss and increased air pollution, which poses additional risks to human health, among other compound effects. 

Extreme heat could also result in inflation caused by risks to product availability, higher transportation costs or a surge in demand for cooling devices, among other things. 

Rising temperatures and prolonged periods of intense heat have significant potential effects on people. It’s likely that heat-related illnesses including heat exhaustion, and mental-health effects caused by stress, fatigue and isolation, will increase; this has an impact on workplace productivity, as well as being a corporate social responsibility concern. 

Extreme heat may also affect public order as discomfort and irritability could spill over into social tensions. Migration of people might also be a factor if extreme heat makes living intolerable in certain areas; tropical regions in particular are already and are likely to be further disproportionately impacted by the effects of rising temperatures. 

Building resilience  

To support businesses and communities in preparing for and responding to extreme heat incidents, AXA recently published Heatwave Public Readiness Guidance that offers insights into ways that organizations can anticipate extreme heat risks and build resilience to them. 

In addition to carrying out heat impact assessments that consider and analyse temperature changes, and determine heat episode impacts and evaluate the consequences, there are concrete, actionable steps that companies can take to put in place adaptation measures to protect people and operations. 

Those adaptation measures could include ensuring that ventilation and air conditioning are adequate and that colleagues have access to sun protection, hydration and appropriate personal protective equipment. Companies can also consider making changes to work schedules to take advantage of cooler periods of the day, and ensure that employees are trained in how to cope in periods of extreme heat. Consideration should be given to particularly vulnerable sections of the population, like pregnant or older people. 

Organizations might also consider how extreme heat can potentially affect equipment and machinery, and regularly testing and updating emergency response plans will also help companies to build resilience. Businesses can also consider using natural or nature-based technologies or low-energy cooling solutions, as part of climate adaptation and business resilience strategies. 

And it is important that as an organization, and as part of the risk industry, we are committed to helping to create greater awareness of this emerging, interconnected and escalating risk to better protect the people, communities, companies and societies in which we live and work – now and into the future. 

Flynn Lebus  is Social Impact Director at AXA XL, leading global sustainability initiatives since October 2023. She focuses on climate, nature, and society solutions to create societal and business value. Previously, Flynn was a Guest Lecturer at Warwick Business School and held roles at FSG (Reimagining Social Change) and Accenture, specializing in ESG, financial services, and social finance. Her career reflects a strong commitment to fostering a fairer, more equitable society through innovative impact initiatives. 

Kate Corby  is Emerging Risks Manager at AXA XL, a role she’s held since 2023. She focuses on identifying and managing emerging risks that may affect businesses, society and the risk industry in the future. Previously, Kate spent over seven years as a Senior Catastrophe Risk Analyst at AXA XL, developing expertise in catastrophe modelling. With extensive experience in risk assessment and underwriting, Kate is dedicated to advancing the understanding of emerging risks.