Planning for the inevitable: Adapt your business to the effects of climate change

The physical impacts of climate change are no longer distant risks; they are unfolding here and now. Floods, heatwaves, hurricanes, and wildfires that once seemed exceptional are striking with growing frequency, disrupting communities and supply chains across the globe. At COP30 in Belém, world leaders placed adaptation and resilience at the center of the climate agenda, stressing that global temperatures are rising faster than expected and that we are on track to breach the 1.5 °C goal. For companies operating in a globalized economy, this reinforces a clear message: preparing for physical climate risk is no longer optional but a core business imperative.  

When physical climate risk hits home 

Recent data demonstrates that economic losses from natural disasters are on the rise, with 2024 alone accounting for USD 327 billion in damages. This global trend was dramatically illustrated in October 2024, when devastating floods hit southeastern Spain. The disaster affected a multitude of sectors, including agriculture, automotive, logistics, retail, and hospitality. Major multinationals were forced to suspend production, leading to total losses of about 16.5 billion EUR. A recent study by the European Investment Bank shows that these effects are not isolated: 66% of EU businesses faced threats from physical climate risk, yet only 22% have a strategy to adapt to a changing climate. 

These assessments often have their greatest influence during the design phase. They help engineers select materials and technologies that reduce  emissions and improve resource efficiency. By grounding decisions in data, LCAs allow companies to compare and improve existing products, evaluate new designs and better understand their impact on the world in which they operate.

Operational stability as an imperative 

In dynamic and highly competitive markets, companies cannot afford to fall behind due to sudden disruptions. Operational stability is not a “nice to have”; it is essential. Firms that integrate climate adaptation into their business continuity planning are better positioned to maintain stakeholder trust, protect market share, and avoid cascading supply chain failures.  

Crucially, adaptation is not limited to preparing for physical climate risks such as floods, droughts, or heatwaves. It also enables companies to address transition risks arising from regulatory shifts, technological disruption, and shifting customer expectations in a decarbonizing economy. 

For business leaders, the message is clear: adaptation must be treated as a strategic growth lever, not just a defensive measure. By proactively reducing reliance on vulnerable markets, anticipating the phase-out of carbon-intensive technologies, and preparing for tightening climate regulation, companies can strengthen resilience while unlocking opportunities for innovation and market leadership.

Sector lessons in adaptation 

Some industries have already learned hard lessons. 

• Chemicals: Extreme flooding in Europe has repeatedly disrupted production sites and logistics networks for the chemical industry, where facilities are often located near rivers. Companies that invested in flood defenses and alternative distribution routes were able to maintain deliveries, while others faced extended periods of downtime and contract penalties. 

• Manufacturing: Heatwaves across Asia have forced rolling blackouts, directly hitting energy-intensive manufacturing operations. Plants with flexible energy sourcing and on-site renewables were able to continue production, while competitors dependent on fragile grids faced costly halts. 

• Automotive: In the aftermath of the 2011 Thailand floods, global automakers experienced massive shortages of critical components. Since then, leaders in the sector have restructured supply chains to diversify sourcing and build greater geographic resilience. Those investments in adaptation now pay off each time regional climate shocks disrupt local suppliers. 

• Energy, Oil & Gas: Hurricanes in the Gulf of Mexico have repeatedly forced the shutdown of offshore platforms and refineries, disrupting global energy supply chains. Companies that invested in more resilient infrastructure, diversified production geographies, and early-warning systems managed to limit downtime and stabilize output. Others, heavily concentrated in high-risk regions and reliant on traditional operations, faced prolonged outages, revenue losses, and mounting regulatory pressure. 

These examples show that physical climate risks are no longer abstract but material and measurable.  

Securing what matters most 

Adaptation can take many forms, from reinforcing infrastructure to diversifying suppliers to redesigning processes around climate resilience. But the most important step is to act. By embedding adaptation into enterprise risk management, strategy, and financial planning, companies can move from reactive crisis management to proactive resilience. 

Solutions tailored to your needs 

Every business faces climate risks differently. Some struggle with vulnerable operations in high-risk regions, others with exposure across complex supply chains, and many with uncertainty about which adaptation measures are worth the investment.  

Sphera’s Sustainability Consultants help organizations cut through this complexity by assessing vulnerabilities, identifying what truly matters for resilience, and guiding the development of adaptation strategies that are realistic, cost-effective, and aligned with long-term business goals. 

Our solutions go beyond risk identification. We support feasibility checks for adaptation measures, readiness reviews for emerging technologies, and practical planning that connects actions to resources and timelines. With SpheraCloud Corporate Sustainability software (SCCS) and our proprietary data, companies can monitor their preparedness, track progress, and demonstrate resilience to regulators, investors, and stakeholders.  

Whether you need a strategic climate adaptation plan, a rapid screening of vulnerabilities, or ongoing monitoring, Sphera delivers solutions tailored to your needs.