Every year, global temperatures are increasing due to climate change. The physical risks linked to this increase are escalating rapidly, posing a significant threat to businesses.
The cost of inaction is immense – without urgent efforts to decarbonize and build resilience, current estimates show that physical risks could impact financial performance of businesses by 2050, reducing EBITDA by 5-25% across critical industries in every global region. While mitigation remains critical, swift action on adaptation is essential to safeguard the resilience of workforces, supply chains, communities, and natural ecosystems that businesses depend on.
Despite the growing urgency, businesses face significant barriers to scaling adaptation and resilience efforts. Internally, making the business case for tackling long-term, uncertain risks can be challenging. Companies often struggle with developing comprehensive resilience strategies, identifying the right solutions that align with business objectives, and determining where and how to invest. Effective collaboration with key stakeholders is also essential but complex, requiring coordinated action across locations and business areas.
As climate change drives more frequent and severe extreme weather events, businesses face increasing exposure to disruptions that threaten operations, supply chains, and financial stability. Furthermore, proactive investment in adaptation and resilience delivers strong returns. Studies show that resilience-focused investments can yield benefit-cost ratios between 2:1 and 10:1, translating into avoided losses, competitive advantages through resilient products and services, and broader social and economic benefits. More resilient businesses are also more attractive to investors, customers, and regulators, reinforcing their long-term viability in an increasingly volatile climate.
WBCSD supports businesses in managing the impacts of climate change by strengthening adaptation and resilience capabilities within and beyond their value chains. Our work helps companies remain competitive in the face of escalating physical climate risks, ensuring their operations, supply chains, ecosystems, and communities can withstand and recover from disruptions.
To drive meaningful action, we have developed the Business Leaders Guide to Climate Adaptation and Resilience, equipping companies with the tools to secure internal buy-in, establish governance structures, and assign clear responsibilities for building resilience. Looking ahead, we are developing an Adaptation Planning Guidance, set to launch in 2025, which will provide the practical tools and frameworks needed to help businesses design, finance, and implement adaptation solutions and build robust, long-term adaptation strategies.
