Talking about the weather is a well-worn cliche for mundane conversation, but get ready for a change. There are increasingly significant reasons to devote serious conversations to the topic. Many companies face grave risks from extreme weather events, and some investors are demanding better disclosure of climate impacts, as well as better plans of action regarding such events.

The economic ripple effects of extreme weather changes can be devastating to companies' financial well-being, not to mention people's livelihoods and overall economies. This is why organizations Ceres, Calvert Investments, and Oxfam International recently released their guide "Physical Risks From Climate Change."

The words "climate change" tend to lead to politicized reactions, but pretending extreme weather events haven't been happening and haven't had impacts on corporate profits and individuals' incomes is ignorant. It's time for heads to emerge from the sand and acknowledge the storms at hand.

Rotten weather
According to the report, last year set records for ugly, weather-related natural disasters and subsequently high financial losses. Extreme weather caused 90% of the disasters, and eight out of the 10 most expensive. The price tag on these terrible events added up to $148 billion, with insured losses of more than $55 billion.

Such events are of utmost importance to investors, given the ripple effects that can drop down to their companies' bottom lines. Here are a few concrete examples of some companies' serious financial side effects cited in the report:

  • Constellation Energy had to purchase power at peak prices during last year's Texas heat wave, which docked its quarterly earnings by about $0.16 per share.        
  • In 2010, Bunge (NYSE: BG) experienced a $56 million fourth-quarter hit related to Brazilian droughts that hurt its sugar and bioenergy businesses.
  • Under Armour (NYSE: UA) recently discovered the weather was too warm for some of its winter-weather apparel. The company's inventories stacked up due to the "unseasonably warm weather" in the 2011-2012 season, chipping away 2 percentage points of growth and putting its anticipated 2012 net revenues at the low end of the company's growth goals.
  • Wind storms, thunderstorms, and tornados in Indiana, the Carolinas, and Ohio cost Duke Energy (NYSE: DUK) big-time. As of the third quarter of 2011, the power company had racked up $75 million in storm restoration costs.
  • Insurance company Axis Capital (NYSE: AXS) rued Hurricane Irene and Tropical Storm Lee last year; its insurance and reinsurance segments had to withstand about $30 million in losses related to the storms.

Snow shortages; water, water everywhere
The ripple effects also have a great deal of economic impact on workers and communities, which of course also affects overall corporate health. Many of these events can reduce peoples' discretionary income in a variety of ways, further constraining consumer spending and wreaking havoc on economic growth.

Just consider how badly the tourism sector can suffer from nasty weather. Hurricanes and tropical storms are well-known, costly beach bummers, but we may not even think about other ways weather impacts change the economic well-being of many specific communities that rely on tourist dollars.

Take what happened at Vail last year, as noted by Vail Resorts' CEO: "For the first time in 30 years, a lack of snow has not allowed us to open the back bowls in Vail as of January 6, 2012, and for the first time since the late 1800s, it did not snow at all in Tahoe in December." On Tuesday, Vail Resorts said skier visits fell 12.6% at its mountains this past season due to the lack of snow.

Then there's commodity pricing, which we all often experience at the checkout. In 2010, floods in Pakistan and Australia devastated cotton crops so badly that cotton prices skyrocketed, leaving companies like VF Corp. (NYSE: VFC) in a difficult balancing act between absorbing the higher costs and raising prices on cotton apparel for already financially strapped consumers.

Straight talk about the weather
The Securities & Exchange Commission requires that companies disclose material risks in their financial filings. The SEC released guidelines for climate-related disclosures in 2010.

Whether such climate-related discussions are officially required or not, corporate managements ought to know that extreme weather and climate changes are risks they should disclose. Fortunately, some have already started disclosing these potential material events in their filings' risk factor sections.

Organizations like Ceres are trying to lead the way in addressing this important issue, as well as offering analysis and ideas about how climate-related disclosure should be addressed by public companies.

We investors need to keep a sharp awareness on these issues, too, and assess whether our companies are not only disclosing risks, but also adequately addressing the looming problems with plans of action; as the report pointed out, addressing such events can represent some economic opportunity, too.

The surprise of natural disasters could be disastrous for our portfolios and overall economic outlooks both here and abroad. However, common sense tells us that awareness and preparedness can mitigate the risks, so hopefully more companies will talk frankly about the weather.

Check back at Fool.com every Wednesday and Friday for Alyce Lomax's column on environmental, social, and governance issues.