Estimates of labour productivity loss from climate model projections of extreme heat: Implications for financial services

Extreme heat can substantially impact worker productivity, causing fatigue, loss of focus, and illness in the workplace. As extreme heat increases under climate change, substantial reductions in labour productivity are expected. According to some models, economic costs from decreased worker productivity will be larger than any other climate related impacts, and corporations are therefore interested in understanding their potential exposure and vulnerability to heat stress in the future. Workplace regulations (e.g. ISO) and epidemiological studies have previously been combined to develop continuous functions relating workplace heat stress to labour productivity. In this work, we utilise productivity loss functions with climate model projections for future extreme heat exposure to assess changes in labour productivity loss. We present a new modelling framework for providing labour productivity loss projections for several scenarios (SSPs), work intensities (low, moderate, and high), and regions, specifically designed for financial services. We include a model of air conditioning availability, with which the productivity loss estimates can be scaled according to the likely adoption and use of cooling systems in the workplace.