Home › magazine › business reports › The hidden costs of heatwaves
The hidden costs of heatwaves
6th of October 2026Europe’s weather maps showed deep red over much of the summer as the continent sweltered under record temperatures. With extreme heat events becoming ever more frequent, Hartley Milner explores their economic impacts and strategies to risk manage climate warming.
I REACHED THE SUMMIT after a long, arduous trek, battling sheeting rain and buffeting winds with every step. As I slumped breathlessly onto a boulder, a fellow hiker emerged from behind the cairn, grinning broadly. “Good afternoon, lovely day for a stroll,” he said, his greeting betraying a very Gallic sense of irony. With a nod to the leaden skies, I responded in kind … “welcome to sunny Scotland!”
“No, I don’t mind a few spots of rain,” he said, “In fact, I’m loving your miserable weather, it’s why I’m over here: to escape the brutal heat in France this summer. In Paris, where I live and work, temperatures regularly nudge 40 degrees celsius. Life there is becoming intolerable.”
Having got formal introductions out of the way, I was intrigued to discover this affable Frenchman was a commercial architect specialising in sustainability and regenerative design, and I wanted to know more about his work. As we picked our way down the rocky mountain path, I asked for his views on how Europe can build resilience against climate warming.
“The biggest problem is that most indoor spaces provide little heat relief for people and may even exacerbate the problem,” Arnaud said. “In France, around 80 per cent of office buildings are more than 20 years old and over 50 per cent were built before the 1980s when the emphasis was on retaining warmth in winter. In summer, they are heat traps.
“Retro-fitting heat resilience into older buildings can be costly and challenging. But we must grasp the nettle … the wildfires that destroyed hundreds of homes and business premises in the Bordeaux region and across much of Europe make that clear. Each country will need to implement a national programme of works. How the works are funded needs to be decided as a matter of urgency. However, retro-fitting buildings can be around 40 per cent less costly than constructing new buildings of the same type.”
Arnaud said his practice had undertaken commissions ranging from basic building conversions, such as installing heat-resistant glazing, rain water capture and natural wind cooling, to large-scale solutions. These include drought-resistant sedum roof gardens and living walls that block the sun’s heat and cool the air through plant evaporation. Both also have a cooling effect on the surrounding environment and provide ‘squats’ for a variety of wildlife species.
Design heat resilience
But he stressed that the future imperative must be to design heat resilience into new-builds. And he cited examples of innovative construction technologies, including the use of high-density aluminium foils that reflect up to 95 per cent of radiant heat away from buildings in summer and trap
interior warmth in winter. Meanwhile, cooling systems are in development that produce many times fewer carbon emissions and use less energy than traditional air-conditioning.
Next generation buildings will likely be able to self-regulate temperatures, using organic ‘phase change’ materials that store and releases large amounts of thermal energy by changing their physical state. The process absorbs heat during the day, keeping interior spaces cool, and at night releases that stored warmth as outdoor temperatures fall. Phase change is a natural process which requires no electricity, significantly contributing to the European Union’s carbon neutral goal, as well as reducing energy costs for consumers.
Fastest-warming continent
Another cool idea for temperature control Arnaud highlighted was a pipe system already in operation below Paris. It works by drawing water from the Seine to cool buildings and then pumps it back into the river, a little warmer but well within ecological harm thresholds. The Louvre, hospitals, schools and major commercial districts are already on the network and there are plans to triple coverage by 2042. “We have the technologies to protect our communities today and more will become mainstream in years to come,” he added.
Europe is the fastest-warming continent on Earth, with temperatures rising at around twice the global average, according to the Copernicus Climate Change Service. The record-breaking heatwaves this summer plunged the EU’s internal market into chaos. Supply chain bottlenecks and disruption to logistics networks led to acute shortages in raw materials, while failed harvests meant more produce had to be imported from abroad, fuelling food price inflation. Refrigerated supermarket units and warehouses faced ambient temperatures exceeding 50°C, making it hard to maintain stable environments for perishables.
A stress test by German insurer Allianz Trade calculates that extreme heat could cost EU economies around €180 billion this year, roughly one per cent of GDP and virtually wiping out the bloc’s growth expectations for 2026. The report, Too hot to grow: The economic costs of extreme heat, flags that a critical heat tolerance threshold is reached at 30°C, beyond which operational and financial damage increases sharply. Worryingly, the bulk of losses are not covered by insurance.
Allianz says: “Most heat damage accumulates through excess mortality, lost working hours, healthcare system pressure and infrastructure stress … channels that indemnity contracts are not designed to handle.”
Allianz also emphasises the impacts on productivity and employee wellbeing. Once temperatures pass the 30°C threshold, physical and cognitive fatigue sets in and labour output per hour drops by about three per cent, or $1.30 (€1.13), for every additional degree. Workers find their focus impaired, leading to sluggish performance and mistakes, and where machinery is involved a heightened risk of accidents. Those employed in heat-exposed sectors such as agriculture, construction, manufacturing, logistics and tourism face some of the greatest health risks.
The EU says it is treating summer heat as a “systemic economic and operational risk” through advisory frameworks, climate risk assessments and resilience strategies. These include guidance for employers on carrying out workplace heat risk assessments, adapting their spaces to better protect employees and helping member states predict operational disruptions. All this is non-binding, while major trade unions are pushing for legally-enforceable maximum workplace temperatures and mandatory heat breaks.
Strike action by workers Esther Lynch, general secretary of the European Trade Union Confederation, told ECJ: “Workers across Europe are being forced to take strike action during summer because it’s the only way to keep themselves safe during dangerously high temperatures. We are also seeing strike action by workers in precarious employment who are being told to choose between putting themselves in danger or not being able to pay their rent. This cannot continue.
“We are warning politicians and employers that they must work with trade unions to organise work during high temperatures in a sensible and safe way, otherwise the numbers of strikes will continue to grow every summer. Building competitiveness does not mean ignoring this problem. It means dealing with it through negotiation with trade unions at European sector and company level.”
MEP Maria Ohisalo, rapporteur for a parliamentary report on extreme temperatures at work, is supporting the unions’ demands. She said: “Right now there is no European-wide regulation
on protection against workplace heat – or cold – exposure, just a patchwork of mere recommendations. But workers everywhere need the protection that only legally-binding and harmonised rules can offer.”
For now, the European Commission is continuing with its advisory programmes. However, before the end of 2026, the it is aiming to have a more ambitious, comprehensive integrated framework for climate resilience and risk management in place. This is expected to comprise a mix of legislative and non-binding measures. The policy was drawn up following a consultation with stakeholders, including business leaders and unions.
Core elements are expected to include targets for building climate resilience across member states; data from Copernicus to guide national and regional decisions; mandatory guidelines for identifying, mapping and updating climate risks and the integration of risk prevention with major public policies and funding. Other key features comprise technical and financial support to help public and private sectors implement climate adaptations and mechanisms to tackle cross-sector risks affecting energy, supply chains and infrastructure.
There are simple steps employers can take to protect their workers. Measures recommended by the European Agency for Safety and Health at Work include:
Work schedules
• Move heavy physical tasks and outdoor work to the cooler early morning or late evening hours.
• Offer more regular, short rest breaks in shaded or cool environments.
• Reduce work intensity during peak heatwave alerts.
The workplace:
• Provide constant access to cool drinking water close to workstations.
• Set up artificial shade, industrial fans or portable cooling stations for outdoor and warehouse teams.
• Block direct sunlight using window blinds, improve ventilation and install or properly maintain air-conditioning.
Staff health
• Show managers and employees how to recognise heat exhaustion and heat stroke symptoms.
• Relax uniform and dress codes in favour of light, breathable UV-protective garments.
• Monitor older workers, pregnant employees or those with chronic conditions more closely.
Employers can also access practical digital tools like OiRA, the Online Interactive Risk Assessment, to evaluate thermal hazards specific to their industry.







