The APEC Climate Center and Kyungnam University (Changwon, Republic of Korea) have recently completed a study on improving the utilization and weather and climate information in commercial applications. This study was commissioned by APCC and has been conducted by Kyungnam University since the project launch in July 2011.

Weather conditions are an external factor that can impact revenues, supply chains, costs, margins, and physical facilities and can therefore present both risks and opportunities for commerce and industry. The study specifically focused on marine shipping and logistics and the apparel and footwear industries, all of which are important industries for the Republic of Korea. The researchers used economic analysis to assess the value of improved weather information, which the authors assert should be should be a freely available public good.

They found that there is an opportunity for shipping companies to use maritime and meteorological software tools to make a voyage plan which minimizes fuel consumption and avoids poor weather conditions. The analysis of weather’s effect on the apparel industry was based on the hypothesis that weather variables and seasonality affect customer’s spending on apparel and footwear. The researchers used econometric modeling to analyze firms’ total quarterly sales against data on weather variables.

The study concluded that there is ample opportunity for businesses to benefit from using weather and climate information and that the challenge is to get more businesses to develop weather management strategies. Creating weather and climate adaptation strategies makes sound business sense and allows firms to hedge against risks and capitalize on opportunities.

This study, which provides a quantitative assessment of how utilizing weather and climate information can benefit the private sector, is part of APCC’s ongoing efforts to provide multidisciplinary climate information services that are valuable and relevant to end-users.

The Final Report for the study has been published in Korean. For more information about the study in English, please contact Mr. Seungwon Chung (swchung@apcc21.org).