A recent report from reinsurer Swiss Re highlights the looming threats businesses and insurance companies face from heatwaves, mold, and plastic pollution. These issues are exacerbated by fossil fuel usage, which contributes to greenhouse gas emissions and provides the raw materials for plastic products.
According to the report, these emerging and evolving risks “could have a major impact on society and industry.” The potential harm from heightened temperatures, the surge in heat-loving fungi, and the proliferation of plastics could place significant financial and legal burdens on businesses.
Jérôme Haegeli, the group’s chief economist, emphasized the importance of recognizing the comprehensive costs associated with prolonged heatwaves affecting human life, economic stability, infrastructure, agriculture, and healthcare, during a recent press statement regarding the report.
“It is important we shine a light on the true cost to human life, our economy, infrastructure, agriculture and healthcare system”
Increasing temperatures are one of the key indicators of climate change driven by human activity. The year 2024 has already surpassed 2023 as the hottest recorded year, and forecasts suggest this record may soon be broken again. The frequency of wildfires escalates during heatwaves, as parched vegetation becomes highly combustible. In addition, energy demands during such events strain power grids, increasing the likelihood of blackouts, both of which contribute to rising property claims, according to the report.
Blackouts during the summer months have risen since the early 2000s in the United States. Heat has emerged as the leading weather-related cause of fatalities, outpacing hurricanes, tornadoes, and other natural disasters. The increasing severity of wildfires in the western states has driven home insurance rates to unprecedented levels, prompting some insurers to exit markets like California.
The report notes that various fungi thrive in warmer conditions, predicting a rise in claims related to toxic mold in hot and humid environments. Additionally, agricultural crops face risks from mold expansion, compounded by an overreliance on fungicides, which may lead to drug-resistant fungal pathogens.
Plastic waste presents another significant environmental and health issue, according to the report. Some environmental advocates have likened the ongoing influx of plastic into oceans to a persistent form of oil spill. Ongoing research aims to clarify the health impacts of microplastics, noted in various food items and even infants’ feces; Swiss Re warns that current exposure levels may be underestimated.
The proliferation of plastic pollution could lead to a surge in litigation targeting companies, the report cautions. Following a recent lawsuit against ExxonMobil in California over plastic waste, state-level legal actions against fossil fuel firms related to climate change have been on the rise. Should new studies establish a connection between microplastics and specific health issues, it might trigger further liability claims against companies, according to Swiss Re.
The report also addresses additional concerns, including issues related to deepfake fraud, ultra-processed foods, and the integration of AI in healthcare. The intent of this annual report is to equip businesses with the information necessary to navigate these emerging risks. However, addressing the fundamental issues of climate change and plastic pollution necessitates confronting the dependence on fossil fuels.
