El Niño is a climate pattern many people recognise by name, but few consider in detail until its effects begin to impact everyday life. This year, El Niño conditions have emerged, with some experts suggesting the potential for a “super El Niño” should the pattern intensify later in the year. While impacts will differ across regions, the situation is already encouraging organisations to look more closely at climate volatility, supply chain resilience and the reliability of energy systems, says our Head of Consultancy, Tim Holman.
El Niño is a naturally occurring phenomenon, driven by unusually warm sea surface temperatures in the Pacific Ocean. Although its origins may feel distant, its consequences are global. These temperature shifts influence weather patterns worldwide, increasing the likelihood of more extreme and less predictable conditions, including hotter climates in some areas, heavier rainfall in others, and greater overall instability.
The phrase “super El Niño” is commonly used to describe a particularly strong event, where these effects become more pronounced. In the UK, the impacts are indirect and less certain, but can increase the chances of unsettled conditions, including wetter and windier weather, alongside the possibility of colder periods later in winter. This adds to the pattern of hotter, drier spells punctuated by intense rainfall that we are already experiencing as a result of climate change (as seen during May and June this year). For businesses, this highlights the importance of preparing for uncertainty that can disrupt operations, energy usage and resilience.
What does this mean for energy demand?
Weather is often considered background context for business activity. However, events like El Niño demonstrate just how reliant organisations are on stable and predictable conditions.
From my perspective, the issue goes beyond a single climate event. Businesses are increasingly operating in a landscape where extreme conditions are both more common and less predictable.
Energy demand is one of the most immediate areas of pressure. As temperatures climb, cooling requirements increase significantly, with air conditioning, refrigeration and ventilation systems working harder and for longer periods. Sectors such as offices, healthcare, data centres, warehousing and retail all feel the impact. Even organisations that have not historically relied on cooling may see their energy usage profiles shift quickly.
At the same time, energy infrastructure can also be affected. Higher temperatures reduce generation efficiency and increase the likelihood of faults across networks. When demand surges rapidly, particularly during heatwaves, prices typically rise in response. These spikes can drive up costs, especially when combined with wider market pressures or network constraints.
This combination of rising demand and increased price volatility creates financial risk for organisations. Maintaining operations requires reliable energy, but the cost of doing so can escalate rapidly.
The wider business impact
Exposure to higher energy costs is only part of the story. In reality, an intense El Niño event can amplify existing business risks.
Operational resilience may be tested as systems, equipment and building infrastructure are pushed beyond their usual limits. Extreme weather can disrupt logistics, affect employee wellbeing and reduce productivity. Higher temperatures can also introduce health and safety challenges, particularly in industries such as manufacturing, warehousing and construction. Localised flooding can interrupt operations and damage physical assets.
Supply chains introduce another layer of complexity. Severe weather affecting transport networks, production facilities or global partners can lead to delays that cascade across operations. For organisations already managing tight margins and complex logistics, this adds further uncertainty.
Climate patterns like El Niño don’t just shape the weather, they reveal how resilient, or vulnerable, our systems really are.
A direct link to sustainability and ESG expectations
At the same time, expectations on businesses to understand and disclose these risks are increasing.
Frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD), the upcoming UK Sustainability Reporting Standards (SRS), SECR and broader ESG requirements are becoming central to how organisations are assessed by investors, regulators and stakeholders. Periods of climate volatility, including El Niño events, bring these expectations into sharper focus.
Sudden increases in electricity consumption will impact Scope 2 emissions, particularly as cooling demand rises. Additional on-site fuel use, such as backup generators, may also increase Scope 1 emissions. Meanwhile, supply chain disruptions can influence Scope 3 emissions, often in ways that are more difficult to anticipate and manage.
Organisations are also expected to disclose their exposure to physical climate risks. Heatwaves, flooding and infrastructure stress are no longer distant scenarios, they are immediate challenges that must be reflected in risk assessments.
Even key performance indicators, such as energy intensity or carbon reduction progress, can be affected by these external factors. Without clear context and transparent reporting, it can be difficult for stakeholders to differentiate between structural inefficiencies and climate driven impacts.
While El Niño itself cannot be controlled, its consequences can be managed. This is an important opportunity for businesses to review their energy strategies and resilience planning. Understanding energy consumption patterns, identifying inefficiencies and stress testing operations against extreme scenarios can make a significant difference.
Practical steps such as optimising building controls, improving insulation or reviewing maintenance schedules for cooling systems can help reduce exposure to sudden demand increases. More strategic measures, including on-site generation, energy storage and demand side response, can provide additional flexibility during periods of grid stress.
Integrating resilience into strategy and reporting
One area that still requires greater focus is integration. Energy management, sustainability strategy and risk management are often treated as separate disciplines. In reality, they are closely interconnected, particularly in the context of climate volatility.
El Niño and similar scenarios should be reflected in TCFD aligned scenario analysis. How does the organisation perform during prolonged heat? What are the cost implications? Where do vulnerabilities exist?
Strong governance, high quality data and consistent reporting processes are essential. These not only support compliance with sustainability reporting and ESG frameworks but also build stakeholder confidence that risks are understood and managed effectively.
Looking ahead
It would be easy to view El Niño as a short term disruption a challenging period to navigate before conditions stabilise. However, this would miss the broader point.
Whether or not this develops into a so called “super El Niño”, the key lesson for businesses remains clear: climate volatility is becoming a core operational and financial risk.
This event is unfolding against the backdrop of long term climate change, which is raising baseline temperatures and increasing the frequency of extreme weather. It highlights how exposed organisations are to changing conditions, how quickly risks can materialise, and how important it is to build resilience into core operations. It also reinforces the need for credible, transparent sustainability reporting that reflects real-world conditions.
Those organisations that take decisive action improving efficiency, strengthening resilience and embedding climate risk into decision making will not only navigate current challenges more effectively, but also be better prepared for the future.
Because one thing is certain, climate volatility is no longer a distant concern, and businesses must be ready for what lies ahead.
Author: Tim Holman – Head of Consultancy, MSc, MEng, CEng, MEI
Tim directs TEAM’s consultancy practice, applying 25+ years in strategy, audits, metering, and compliance to deliver robust, audit‑ready results for customers. A Chartered Energy Engineer and Member of the Energy Institute, Tim holds an MSc in Energy Conservation and the Environment from Cranfield University and an MEng in Mechanical Engineering from the University of Salford.