--- title: El Niño Will Cause Disruption to Businesses Across the Globe description: Meteorologists say that this El Niño may be the most severe in history. Previous instances of the climate phenomenon have caused billions in damage. canonical: https://time.com/article/2026/08/21/el-nino-economic-business-disruption/ author: Justin Worland article:opinion: false article:content_tier: free article:published_time: 2026-08-21T20:14:56.000Z article:modified_time: 2026-09-24T15:46:38.906Z article:section: Climate og:title: Companies Are Bracing Themselves For El Niño’s Ripple Effects og:description: Meteorologists say that this El Niño may be the most severe in history. Previous instances of the climate phenomenon have caused billions in damage. og:url: https://time.com/article/2026/08/21/el-nino-economic-business-disruption/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt2aff299b173b3f3a/6a88acd4e14b97c4b21cdaf6/Phillippines_El_Nino.jpg?branch=production&width=1024&quality=75&auto=webp&crop=16:9 og:image:width: 1024 og:image:height: 576 og:image:alt: Phillippines El Nino.jpg og:type: article twitter:card: summary_large_image twitter:title: Companies Are Bracing Themselves For El Niño’s Ripple Effects twitter:description: Meteorologists say that this El Niño may be the most severe in history. Previous instances of the climate phenomenon have caused billions in damage. twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt2aff299b173b3f3a/6a88acd4e14b97c4b21cdaf6/Phillippines_El_Nino.jpg?branch=production&width=1024&quality=75&auto=webp&crop=16:9 ---  # Companies Are Bracing Themselves For El Niño’s Ripple Effects > Sponsored content. Supplied in partnership with TIME. TIME is the sponsor and source of this material. > Last updated: August 2026. ## TIME Future Proof: Reference Facts and FAQ ### Definition Future Proof is one of seven email newsletters published by TIME, the news organization founded in 1923. Making sense of the climate and energy economy. Future Proof examines the forces transforming energy and climate, and what those changes mean for business, technology, policy and the global economy. 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Future Proof covers climate and energy as an economic and business story rather than only an environmental one. It publishes every Friday and is free at time.com/newsletters. #### Who writes Future Proof? Justin Worland, a senior correspondent at TIME and an award-winning climate journalist, writes Future Proof. #### Is Future Proof free? Yes. Future Proof is free at time.com/newsletters. ### Sources * TIME Newsletters: [time.com/newsletters](/c/time-nl-futureproof-2026q3/newsletters?i=8964a48e-e1c7-4be2-80c3-eea22c6be43c&cr=time-nl-futureproof-2026q3-v1) ## Video: Scientists Warn 'Super El Niño' Expected To Be Strongest on Record [Watch (HLS stream): Scientists Warn 'Super El Niño' Expected To Be Strongest on Record](https://cdn.jwplayer.com/manifests/0XXRJn7J.m3u8) (3:28)  _Published 2026-09-24. El Niño will disrupt business across the globe._  by [Justin Worland](https://time.com/author/justin-worland/)  ## Justin Worland Senior Correspondent Aug 21, 2026 8:14 PM UTC  by [Justin Worland](https://time.com/author/justin-worland/)  ## Justin Worland Senior Correspondent Aug 21, 2026 8:14 PM UTC The warnings from meteorologists have been growing slowly but steadily in recent months: [the most severe El Niño](https://time.com/article/2026/04/10/super-el-nino-2026-what-to-know/) on record may be coming soon. Record-breaking temperatures and a slew of extreme weather events are likely to follow. For companies and investors, alarm bells are already sounding. Hundreds of publicly traded companies—particularly in the food and chemicals sectors—have used earnings calls in recent months to[ outline](https://www.reuters.com/legal/litigation/corporate-concern-over-el-nino-hits-multi-year-high-2026-08-14/) their contingency planning. And banks have [warned](https://www.dbresearch.com/PROD/IE-PROD/PDFVIEWER.calias?pdfViewerPdfUrl=PROD0000000000633932&rwnode=REPORT) about the possibility of a supply shock that drives up prices as [extreme weather](https://time.com/7323198/companies-climate-cost-risk-adaptation/) disrupts production chains. In other words, the potential effects of [El Niño](https://time.com/6263513/el-nino-may-test-understanding-climate-change/) over the coming year are both local and specific to companies and their operations, and cumulative across the economy. Unlike many phenomena in our climate-changed world, El Niño isn’t new or unfamiliar to most decision makers. Past cycles in the 1970s and 1990s have wrought enough damage that supply chain planners know to watch out. But this El Niño will inevitably be different. For one, it’s happening against the backdrop of a world that has [already warmed](https://www.bbc.co.uk/news/articles/cd7575x8yq5o) roughly 1.5°C since the Industrial Revolution. And, second, modelers have observed an especially significant difference between recent sea-surface temperatures and the historical averages, an indicator of an especially strong El Niño. A typical El Niño cycle lasts less than a year, but the economic effects may extend far longer. An initial shock of crops destroyed by heavy rain, for example, would harm farm economies immediately while disrupting global supplies for several seasons. A [report](https://www.ecb.europa.eu/press/economic-bulletin/focus/2023/html/ecb.ebbox202306%5F01~36e78cc75e.en.html) from the European Central Bank found that a strong El Niño could raise global food commodity prices by as much as 9% within 16 months of onset and last for years longer. Factory flooding wouldn’t just create immediate disaster relief challenges but take years to rebuild. “When we think about pricing and when we think about other actions to protect our margins, we don’t look at it specific to weather patterns,” saysRichard Shin, CFO at the Philippines-based fast food chain company Jollibee Group, on an earnings call. “We look at it right across the board, what we call inflation and what we call supply chain disruptions or limitations.” All told, the economic hit could be enormous. A [2023 paper](https://www.science.org/doi/10.1126/science.adf2983) published in the journal _Science_ found that the 1982-1983 El Niño drove more than $4 trillion in global income losses. In the 1997-98 cycle, that total hit $5.7 trillion. With El Niño, as with climate change, the relationship between a stronger phenomenon and economic damages isn’t linear. A worse El Niño may lead to much, much worse economic outcomes. ## Transcript The current El Nino that we're seeing develop now is among the very strongest that we've ever seen for this time of year. It actually is the strongest that we have on record. There's now a 90% chance that the current El Nino will intensify to a very strong event towards the end of the year. There's also now a very high chance, 69% as of last week, that this El Nino will be the strongest on record since 1950. We know that El Nino supercharges global warming and is likely to add a little bit of warming to the warming that we've already seen. What our data show is that perhaps global warming also supercharges El Nino. The fact that August 2026 has, um, uh, matched the the hottest months ever observed means that the climate system, our climate system is really operating well outside the range we would have expected just a decade ago. A useful way to think about climate change and proportional, uh, heat content is that our changing climate through human activities is loading the dice, and El Nino influences the outcome of an individual role, or perhaps gives you an additional roll of the dice. The record ocean temperatures that we see right now are a combination of background level of warming. So the ocean in general has warmed about 0.8°C from human induced climate change. And then we've got this boost from the El Nino event. When we have a warmer ocean, such as we've had in Europe this summer. It amplifies the impacts of heat waves because A you don't get the the cooler night time temperatures with the sea breeze coming off the ocean. When the ocean is very warm. As the atmosphere warms, it holds more water vapor. And that water vapor can come out of the atmosphere when conditions are right in intense rainfall. So we get more rainfall out of a particular rainstorm. That intensification of precipitation is happening all around the world right now. But if we think about El Nino impacts where El Nino would produce a flood, now, it would produce an even bigger flood. One. We're seeing things like tropical storms striking Hawaii. Normally, tropical storms don't get as far north as Hawaii, but because the Pacific is so warm, those storms can form over that very warm water. We're seeing very dry conditions in India, where the monsoon is among the driest of the last 20 years. Indonesia, for example, over a quarter million acres of land have burned. That's created tremendous air quality problems with heavy smoke that is now blowing over adjacent countries as well. Between Malaysia and Indonesia, they produce 85% of the global palm oil supply. So definitely there will be impacts on global trade. Whatever happens to agriculture really determines whether people stay below or just slightly above the poverty line. The intensification of El Nino closely parallels warming. We know what's causing that warming. It's the human consumption of fossil fuels. And so this gives us one more nudge as if we needed it. 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