From the Backseat to the Front Row: The Urgent Need for Adaptation

As climate change and nature degradation accelerate in intensity and frequency, building resilience has never been more urgent. Recent heatwaves, wildfires, and floods have caused widespread destruction in many parts of the world—from Greece to India, Portugal, South Africa, and Texas. The northern part of China received a year’s worth of rain in a single week in July. The summer’s torrential rains in the country caused hundreds of deaths and billions of dollars in economic losses.

While mitigation tackles root causes—reducing harmful greenhouse gas emissions—adaptation helps businesses, communities, and systems cope with impacts that are already unfolding and projected to increase. Alongside climate mitigation, adaptation, which can safeguard nature’s contribution to society, is essential to protect the health, livelihoods, and rights of people, including the most vulnerable who are disproportionately affected by climate impacts.

Although the Global Goal on Adaptation and the UAE Framework for Global Climate Resilience call on all actors to “enhance adaptive capacity, strengthen resilience, and reduce vulnerability to climate change,” the adaptation gap continues to widen, with less than 2 percent of adaptation funding coming from the private sector. The pace and scale of adaptation efforts are falling short to address the urgency and complexity of these challenges.

While barriers like competing business priorities, limited awareness of opportunities, and conceptual misalignment and fragmented guidance must be addressed, momentum to accelerate focus and investment in adaptation is building:

• Climate disclosure frameworks like IFRS S2 and the EU Corporate Sustainability Reporting Directive (CSRD) now require companies to disclose physical climate risks and how they’re being managed.
• Asset managers like Impax and Breckinridge are integrating climate resilience into investment strategies, and investor coalitions—such as Climate Action 100+—are pushing for companies to demonstrate how they are adapting—not just disclosing climate risks. Capital is shifting toward businesses that can withstand the climate disruptions already unfolding.
• Many companies operate in vulnerable markets, where insurance is becoming unaffordable or unavailable, forcing companies to look at adaptation as a form of self-insurance.
• Growing evidence demonstrates the financial impact of climate change on business, underscoring both the high cost of inaction and the opportunity of proactive investment. For unprepared companies, individual physical risks alone could erode 5-25 percent of their 2050 EBITDA. By contrast, for businesses that invest in adaptation during this decisive decade, every US dollar invested could generate up to US$12 in overall economic benefits. 
• In light of this, COP30 CEO Ana Toni has urged that Belém mark a turning point to accelerate adaptation implementation as part of a broader push for action. As such, the upcoming COP30 is emerging as the Adaptation COP, with prospects for decisive action to accelerate momentum.

What Businesses Can Do Now?

Here are seven practical steps companies can take today to build resilience:

Conduct a Comprehensive Climate Risk and Opportunity Assessment 

Companies should conduct a comprehensive climate risk and opportunity assessment across their operations, supply chains, and the communities and ecosystems on which they depend. Climate risk arises when climate hazards, such as extreme heat, storms, or flooding, interact with the degree of exposure and the underlying vulnerabilities of people, assets, and systems. This means that the same hazard can have very different impacts depending on where and how it strikes, and on the resilience of those affected. By applying both a nature- and human rights-lens, and by engaging people affected—employees, suppliers, community members—businesses can identify the hotspots where risks are most acute and opportunities for resilience and innovation are greatest.

Identify and Classify Existing Adaptation Activities

Many businesses already invest in adaptation—such as nature-based solutions, climate-smart infrastructure, or employee health measures—without labeling it as such. Conducting an inventory of these existing and potential activities provides a foundation to build upon, while establishing company-wide policies and strategies ensures that baseline resilience is strengthened consistently across operations and the value chain.

Elevate Adaptation to Your Board and Executive Leadership

Position adaptation alongside mitigation and transition planning in boardroom discussions. Secure top-level buy-in to define a clear corporate adaptation strategy that aligns with enterprise risk, capital planning, and long-term growth. This can help ensure adaptation is integrated into corporate strategy, adding both credibility and accountability.  

Build Collective Resilience

Vulnerable communities bear the brunt from climate change—with the loss of livelihoods, disease, disrupted essential services, and displacement. Because a healthy environment is essential to meet society’s basic needs and for businesses to thrive, companies can look to build shared resilience, protecting the workforce, suppliers, and consumers. Consider place-based collaboration in high climate risk business and sourcing areas, working with peers, governments, and civil society. Collaborate with local authorities and community leaders to support their adaptation efforts. Offer expertise, resources, and investments in infrastructure that bolster community resilience and complement governmental efforts.

Align with Global Adaptation Frameworks

Track and align your efforts with frameworks like the Global Goal on Adaptation (GGA), the UAE Framework for Global Climate Resilience, and National Adaptation Plans (NAPs) in key markets. This ensures credibility and coherence with global goals and potential policy directions.

Use Your Corporate Voice to Push for Clear, Ambitious Policies

Engage publicly and through coalitions to emphasize the importance of a robust enabling environment for businesses to accelerate investment in adaptation. Companies have a powerful role to play in shaping policy outcomes—especially to strengthen integrated planning, mobilizing financing, and facilitating partnerships.  

Looking Ahead

As adaptation steps into the spotlight, businesses have both a responsibility and an opportunity to lead. The real work begins now—through tangible actions that build adaptive capacity and reduce vulnerability. To support companies on this journey, BSR will be releasing new business-relevant materials in the coming months, including analysis and guidance to help companies define, prioritize, and scale their adaptation and resilience strategies.

If you are interested in climate adaptation and resilience, we encourage you to reach out to BSR’s Climate and Nature team.

This article was originally published at the BSR website "Sustainability Insights" and is written by Eileen Gallagher, Director Climate and Nature, Beatriz Osorio Marugán, Manager, Climate and Nature & Julie Dugard, Associate Director, Climate and Nature at BSR.