All posts tagged geographic diversification

Does Geographic Diversification Work to Mitigate a Company’s Weather Risk?

geo_div

Meteo Protect has released a ground-breaking new study tackling the decades-old presumption that companies operating in different regions mitigate the losses sustained in one region as a result of unfavourable weather in another. Multinationals take note: when it comes to managing weather risks, you may be steering your ships right into the storm.

Weather affects sales volumes and profits of many firms in many sectors. The risk to which firms are exposed is not a matter of regular seasonal fluctuations but rather deviations from the seasonal cycle. For example, when the summer is cooler than normal, a brewer sells less beer, and heating demand is lower if winter is warmer than usual. Overall, it is estimated that 70% of the firms are exposed to weather risk and the financial losses caused by unseasonal weather can be very significant.

Continue Reading