What's a weather-sensitive business and what are its consequences?

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Weather conditions have a significant impact on business activities. In fact, according to the U.S. Department of Commerce, 70% of the global economy is believed to be weather-dependent. So, what exactly is a weather-sensitive business?

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An enterprise is considered as weather-sensitive when the planning or operation of its activities relies on weather conditions and when these have a direct impact on sales trends. The consequences can be both positive and negative for the company. For example, the occurrence of a heatwave could, on the one hand, reduce the number of visitors to certain outdoor tourist sites that are highly exposed to the heat, but on the other hand, increase the sales of museums and cinemas with air conditioning.

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Extreme weather events, challenging to predict and growing in frequency due to climate change, can radically jeopardize companies through various risks:

- Employee and customer safety
- Disruption of the supply chain
- Financial risk
- Damage to merchandise
- Decline in customer satisfaction
- Environmental pollution

Not all sectors are equal when it comes to weather dependency. Among the most sensitive sectors are agriculture, tourism, transportation, construction, energy, events, healthcare, logistics, and the environment.

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Here are a few examples of weather-sensitive businesses and their consequences:

- Agriculture: Farmers are heavily impacted by weather conditions as their operations depend on factors like temperature, precipitation, and humidity. Prolonged droughts, floods, frost, or storms can lead to crop losses and financial difficulties.

- Construction: Construction projects can be delayed or halted due to weather conditions such as heavy rain, snow, or extreme temperatures. This can result in project delays, additional costs, and logistical challenges.

- Smart Buildings: Weather forecasts play a crucial role in optimizing smart building operations and enhancing occupant experiences. By integrating relevant weather data, intelligent building systems can anticipate external conditions like temperature, humidity, precipitation, and sunlight. This proactive anticipation enables the regulation of heating, ventilation, and air conditioning (HVAC) systems based on projected needs, minimizing energy consumption while maintaining indoor comfort. Furthermore, weather forecasts facilitate better planning of energy resources such as lighting and automated shades, in sync with upcoming atmospheric conditions. By combining weather forecasts with other building data and processing them using smart algorithms, smart buildings can create more energy-efficient, pleasant, and efficient environments, contributing to carbon footprint reduction.

- Transport: Weather forecasts play a critical role in transportation management, be it for passengers or goods. By providing insights into upcoming weather conditions, these forecasts enable operators to plan and adjust their activities accordingly. For passenger transportation, forecasts help anticipate potential delays, improve safety, and provide real-time information to travelers. In the case of cargo transportation, weather forecasts influence logistic decisions, aiding in loss prevention, optimizing routes, and adjusting inventory based on expected demand. Overall, meteorological data enhances efficiency, resilience, and stakeholder satisfaction in the transportation sector.

- Renewable Energy Sector: Renewable energy sources face a significant challenge, the intermittent production caused by weather conditions. In the case of solar energy, the impact of a cloudy spell over a solar power plant can be very significant and can lead to an 80% drop in production within minutes. Similar challenges apply to wind turbines, where production variability is directly linked to wind patterns. Therefore, weather forecasts are essential for reliably integrating solar and wind energy into the power grid, providing valuable data to balance real-time supply and demand. They form a foundational pillar for effectively harnessing solar and wind potentials, contributing to efficient and stable renewable energy production.

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More and more business leaders are recognizing this sensitivity to the weather, and looking for relevant solutions to reduce these risks. Among the innovative options available, decision support tools allow the integration of high-performance weather data into intelligent software. These reliable and precise data enhance operational and strategic decision-making, aiming to use resources more efficiently and reduce environmental impact based on upcoming weather conditions.

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