The emerging El Niño could cause wind drought in North America, which in turn would have a significant effect on renewable energy production in the region. This is amongst the findings of a report compiled by WTW, which outlines how this year’s combination of El Niño and exceptional Atlantic warmth will affect weather patterns and temperatures.

Helene Galy, managing director of the WTW Research Network, said “When quantifying natural catastrophe risk, it is crucial to incorporate in-depth scientific analysis in our modelling.

"As we are seeing with the current wildfires and extreme weather across Europe, China and North America, the business impact of these disasters means it is crucial that risk managers understand their potential consequences, as well as learning lessons from previous events and the value and limits of seasonal forecasting.”

Key report findings (Source: Natural Catastrophe Review, WTW)

The Natural Catastrophe Review (covering the period January to June 2023) outlines the key perils that must be monitored, and why. Key findings include:

• As the world warms, we continue to see natural disasters, such as the unprecedented Canadian wildfires that began in May and have burned over 11 million hectares to date.

• Human activities, such as land use, often exacerbate the impacts of natural disasters as we saw this year with the floods in New Zealand and Italy and wildfires in Chile.

• Awareness needs to be raised about potential socio-economic tipping points, where gradual climate change leads to sudden socio-economic shifts such as the collapse of property prices.

• During an El Niño event, the atmosphere absorbs more heat while the ocean takes up less and so two to three months after the event begins, global surface temperatures increase.

• For three years in a row, Earth’s largest ocean has been stuck in its La Niña configuration. Should the Pacific flip to El Niño, businesses should prepare for record-high temperatures, unusual weather and slower economic growth.

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