Adaptation and Resilience: How business can thrive in a changing climate

How can business continue to perform, invest, and grow as climate impacts intensify?

A new paper from the Council on Sustainability Transformation, a group of respected leaders from business, government, and academia, sets out the urgency of adaptation and outlines actions companies can take in building an adaptation strategy.

Climate impacts are already affecting worker safety, supply chains, investment, and performance, and more change is locked into the climate system. The 2026 European heatwaves cost the EU an estimated USD 200 billion, equal to its forecast economic growth for the year. Nepal’s devastating flooding this August, which killed more than 1,300 people and cost a minimum of USD 4-5 billion in damage, is now being described as the result of a “compound crisis” of climatic and other factors.

Adaptation is now a mainstream business issue requiring investment and leadership. It does not replace mitigation; businesses must keep cutting emissions while preparing for unavoidable impacts.

The paper sets out three ways adaptation creates value for business. It also outlines seven actions that leaders should consider when developing an adaptation strategy.

How does adaptation create value for businesses?

• Maintain performance: Reduce disruption to day-to-day operations, productivity, supply chains, infrastructure, and customer service. This keeps people and workplaces safe and operational under local climate conditions.

• Protect long-term value: Safeguard assets, critical resources, insurability, and access to finance. This protects the long-term viability of investments and surrounding communities.

• Build competitive advantage and spark innovation: Improve reliability, strengthen customer and investor confidence, and develop products and services designed for changing conditions.

What actions should companies consider in developing an adaptation strategy?

1. Build climate intelligence.

2. Address immediate material risks.

3. Evaluate adaptation through a long-term value lens.

4. Embed adaptation into business decisions.

5. Make the distribution of costs and benefits explicit.

6. Engage stakeholders to build trust.

7. Strengthen adaptive capacity and protect credible mitigation commitments.

These actions are discussed in detail within the paper, alongside case studies from companies such as Coca-Cola Consolidated, Advanta Seeds, and Anglo American, which have undertaken adaptation measures to build resilience against a changing climate. The leadership challenge is no longer whether businesses need to adapt. It is how quickly, effectively, and responsibly they can do so.

Download the paper "Adaptation and Resilience: How business can thrive in a changing climate" or the executive summary to read more.

The Council on Sustainability Transformation, convened by ERM, helps business leaders and stakeholders navigate the complexities of sustainability transformation. For earlier papers, please visit the Council webpage.