The Lost Working Week: How much heat can small businesses take?
More than 1 in 5 businesses lose at least one working week to extreme heat every year.
Small businesses underpin economies and sustain livelihoods on a vast scale; enterprises with fewer than 10 workers account for almost half of non-agricultural employment globally. Yet approaches to protecting their working time, incomes and livelihoods from extreme heat remain fragmented and difficult to scale.
We cannot leave the world’s small businesses to face rising temperatures alone.
Image features Kavita, Market Store Owner – Ahmedabad, India
What 900 small businesses told us about the impact of extreme heat
To better understand how extreme heat affects small businesses, Caribou, with partners Yazi and Aareton Blue, surveyed 903 business owners in Kenya, Malawi, Nigeria, South Africa, Uganda, the UK, and the USA. Participants included outdoor and mobile traders, and businesses operating primarily from fixed premises.
Meet the small businesses
Each dot below represents one small business surveyed. Use the interactive visualization to explore how the impacts of extreme heat and the actions businesses took to cope vary by country, owner’s gender, business size, sector, and exposure to heat. Hover over any dot to see that business owner’s survey responses.
Coping actions undertaken by business owners in response to extreme heat include: changing working hours, taking more breaks, using cooling equipment, temporarily closing, and moving work to a cooler location.
How extreme heat disrupts small businesses
Our findings show how heat affects the day-to-day operation of small businesses:
Trading
53% of businesses reported losing trading time in the past year because of extreme heat.
Workers
1 in 3 businesses reported that staff had felt unwell or worked more slowly due to heat.
Customers
31% of businesses reported having fewer customers in periods of extreme heat.
Goods
1 in 5 businesses reported experiencing stock spoilage due to extreme heat.
Power & costs
37% of businesses reported spending more on cooling, ice, or electricity because of heat.
Capacity to respond
~10% of businesses said they were unable to afford to take action to cope with heat.
A global problem with local impacts
The effects of extreme heat are widespread, but the scale and nature of the disruption vary considerably by location.
Smallest businesses take the biggest hit
The smallest businesses face a double disadvantage: research from Indonesia suggests that they lose a greater share of revenue as temperatures rise, and Caribou’s survey indicates that they have fewer resources with which to protect themselves; 14% of solo operators said they could not afford a response to extreme heat, compared with just 2% of businesses employing six or more people.
Those most exposed to lost working time and income may therefore also be the least able to invest in measures that could protect them.
Different working environments require different responses to heat
Where a business operates shapes both its exposure to heat and the solutions available to protect it.
Roaming traders, motorcycle transport providers, roadside vendors, market traders
Situation: Most earning activity takes place outdoors or in open structures. These businesses have little control over ambient and radiant heat, especially when work takes place in direct sunlight.
Solutions: Protection needs to be portable, shared, or place-based. Shade, canopies, airflow, hydration, rest, and changes to working hours can reduce exposure and preserve usable earning hours.
Market stalls, kiosks, workshops, offices, storefronts
Situation: Most activity takes place within a bounded space without air conditioning. Enclosure may shelter these businesses from direct sun, but can also trap heat and limit airflow.
Solutions: Buildings can be cooled without conventional air conditioning. Shade, cool roofs, better ventilation, efficient fans, evaporative cooling, and selective cooling can protect people and preserve working capacity.
Market stalls, kiosks, workshops, offices, and storefronts
Situation: Air conditioning can protect people, productivity, and stock. However, power cuts or equipment failure can return a business abruptly to the heat, while exposure outside work can still cause worker absence.
Solutions: Protection via air conditioning depends on efficient equipment, reliable electricity, affordable running costs, and maintenance. Backup power and lower-carbon electricity can make cooling more reliable and sustainable.
How heat turns into lasting business losses
Financial resilience often determines whether a business can absorb a heat-related loss or must carry it into the next hot period.
- Access to finance cushions losses. Revenues fell by 30% among firms with limited access to finance, compared with 23% among those with strong access.
- Informal coping is common, but formal protection is not. In our survey, 26% of businesses borrowed or drew on savings to cope with heat-related losses, while just 3% had insurance covering heat.
- One hot period can weaken resilience to the next. Depleted savings and new debt leave businesses less able to withstand the following heatwave, compounded by unpaid household work that falls disproportionately on women entrepreneurs.
Image features Abeer, Food Truck Owner | London, United Kingdom
The moment to act is now
Extreme heat is intensifying. The hottest conditions are getting hotter, the number of dangerous heat days is projected to increase sharply, and heat stress could reduce total working hours by 2.2% by 2030—equivalent to 80 million full-time jobs.
For the smallest businesses, lost hours become lost days, and lost days become lost weeks. Effects persist long after the heat subsides: lost income, spoiled stock, higher costs, depleted savings, and new debt weaken businesses and the livelihoods they support.
Repeated often enough, this cycle risks widening the gap between the smallest businesses and better-capitalised competitors. Some may fall further behind; others may never recover.
Join the Extreme Heat and Small Business Lab
We cannot afford to leave the world’s smallest businesses to face this hotter future alone. The people whose livelihoods depend on them cannot afford it. The economies they sustain cannot afford it. And neither can an effective climate response.
Small businesses are already adapting: changing working hours, adding shade and ventilation, buying fans and cooling equipment, and protecting stock. But these measures are funded through cash flow, savings, or informal borrowing and do not always provide lasting protection.
The central challenge is scale. These are millions of heterogeneous enterprises, many with limited capacity to invest. They cannot be reached one at a time. Solutions must be affordable for businesses operating on thin margins, and viable for those who provide, finance and maintain them.
How can effective, affordable protection from extreme heat reach the world’s smallest businesses at scale? That is the question we want to answer with others.
Reach out to Annabel to explore becoming a partner in Caribou’s Extreme Heat and Small Business Lab.
The Lost Working Week
How Extreme Heat Disrupts the World’s Smallest Businesses
Authors Caribou
