Weather: The Lucrative Business Of Weather Forecasting
Due to climate change, the business of weather forecasting has never been more lucrative. As individuals and professionals confront increasingly extreme phenomena, the weather has become an obsession for some and a profitable venture for others.
70% of economic activity is sensitive to weather conditions.
Weather forecasts have a direct influence on the daily lives of a majority of French people, for organizing their leisure and vacation activities as well as their professional activities.
It is estimated that 70 to 80% of global economic activity is weather-sensitive, meaning it is influenced by weather conditions. Temperatures affect sales of clothing and firewood, but also sales of soup or cold drinks.
The weather sensitivity of a sector naturally varies according to the nature of its activities and the products marketed. But very serious studies estimate that 25% of the French GDP and 70% of the global GDP are impacted by the weather.
It is therefore not surprising that certain groups like Climpact-Metnext have specialized in meteorological and statistical tools for businesses. This group, acquired by Weathernews in 2016, is the European leader in the weather sensitivity sector. It analyzes climate data to anticipate their impact on business activity.
Businesses facing climate risk
When we talk about professions exposed to the whims of the weather, we mostly think of farmers whose yields directly depend on weather conditions. It is true that agricultural professionals spend fortunes to protect themselves from hail and frost and to insure against bad weather.
However, even though they are on the front line facing droughts or heatwaves and hail that devastates crops, farmers are far from being the only ones who have to manage what is now called "climate risk".
Other sectors, such as energy, tourism, and trade, are particularly weather-sensitive, so much so that large groups like Nestlé, Coca-Cola, or EDF do not hesitate to use the "climatic decision-making solutions" of Climpact-Metnext.
A business boosted by climate change
In the history of humanity, the weather challenges that farmers and sailors have to face, for example, are not new. However, what is new is the climate disruption and the growing gap between the observed temperatures and the so-called "seasonal norms". There are no longer seasons, as they say...
In this context, the obsession with the weather also reaches the general public. Individuals seem to have developed a collective addiction to weather forecasts, especially since they are displayed almost in real time on their smartphones... In April 2022, more than 26 million French people had consulted one or several specialized websites over a month.
With the increase in storms, drought episodes, wildfires, and flood risks, there is also a rising demand for weather forecasts tailored to specific professions, such as insurers and airport managers.
The economic repercussions of climate disruptions are already numerous. Not only has the cost of climate-related damages skyrocketed since the 1990s, but repeated heatwaves disrupt the sales of many products. According to Climpact-Metnext, 40% of consumer goods sales in France would be influenced by the weather.
According to a study published on Tuesday, May 14, 2024, in the journal Nature, the summer of 2023 in the Northern Hemisphere was the hottest since 2000 years. Unlike the planet, the business of weather forecasting seems to be promised a bright future.
