How to Build Business Resilience in 2025 and Beyond

Andy Paterson • May 8th, 2025.

In 2024, the US experienced 27 climate-related disasters that caused $1 billion worth of damage or more. However, the actual cost of these climate disasters could be as much as 60% higher than most headline figures suggest, as reported losses typically only reflect insured damages. 

As climate risks increasingly translate into business risks, companies must strengthen their climate resilience to prepare for and adapt to the rising frequency and severity of these events.

To get a better understanding of what climate resilience is, why companies need to consider it, how it impacts key sectors of the economy, and how businesses can achieve it, continue reading this article. 

What is Climate Resilience?

Climate resilience is the ability to anticipate, adapt to, and thrive in the face of a changing climate. 

It means that instead of just riding out a storm and taking a wait-and-see approach, companies proactively adapt to floods, droughts, heat waves, and other extreme weather trends. For businesses, that means:

• Assessing exposure across business assets, operations, and supply chains.
• Integrating different warming scenarios (2.0°C world, 3°C world, etc.) into business strategy and decision making.
• Turning risks into opportunities, adapting operations, supply chains, and products to get ahead of increasingly common climate risks. 

Climate Resilience vs. Adaptation

Climate resilience and climate adaptation are very similar and often used synonymously, but are slightly different.

• Adaptation refers to the specific actions organizations take to adjust to current or expected climate risks.
• Resilience is broader. It’s the ability of an organization to anticipate, cope, recover from, and evolve in response to those risks.

Examples of the differences:

• Climate Adaptation:
  Includes building sea walls to prevent flooding, relocating operations out of high-risk areas, shifting crop varieties, or diversifying suppliers to ensure continuity.
  
• Climate Resilience:
  Encompasses adaptation but goes further. A resilient company may first cope with rising heat, then adapt supply chains or operations, and ultimately transform its business model or relocate assets to remain viable in the long term.

Why Climate Resilience is A Business Imperative

The cost of climate disasters is accelerating. In the US, the number of $1 billion disasters per year has almost doubled from an average of 9 each year for the last 50 years to more than 20 in the last 5. 

As climate risks escalate, climate resilience is becoming mission-critical for business leaders across all sectors and regions. A growing body of evidence suggests that investments in assessing, preventing, and adapting to climate risks are delivering a competitive advantage. A recent study suggests that investments in adaptation could yield a return of up to $19 for every $1 spent. 

However, that number does not consider additional benefits of a climate-resilient company:

• Compliance Readiness: A rapidly evolving regulatory landscape requires companies worldwide to assess and report climate risks and opportunities. Climate resilience means being prepared for rules, such as California’s upcoming Climate Reporting Rule and the EU’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD).
• Operational Continuity: Resilient companies are better equipped to maintain business operations during climate-related disruptions, minimizing downtime, protecting revenue, and gaining an edge over competitors who are slower to respond.
• Brand Trust: Having a company that is synonymous with having climate-resilient operations and products means that when a climate event happens, customers come to you.

Climate Resilience in Agriculture

One of the areas where climate change will be most profoundly felt is in the agricultural sector. Impacts felt in agriculture will also be felt in various other sectors, from food and beverage to energy and apparel. 

Increased heat, precipitation, and other climate-related events could see yields of key crops drop by 35% by 2050, and where and when certain crops can grow could change drastically. These impacts will affect both growers and procurement leaders, who rely on low-cost and readily available supplies to create their products. 

To build resilience, both producers and sourcers can take three key steps: 

1. Understanding how current crops are impacted by different climate scenarios.
2. Plan for the long term, working with supply chain partners to build a collaborative resilience.
3. Use data modelling tools to make short-term decisions about when and where to grow and buy crops.

How ClimateAi Can Help

ClimateAi is tracking how these climate events are impacting crops on both the daily and long-term scale through our Climate Yield and Risk Monitoring tools. Every season, we see yields affected by extreme heat, droughts, and other climate-related trends. 

For example, this year we predicted that there would be yield reductions across all three of the US major grain crops, mainly due to extreme heat and drought. 

Understanding the risks and yield outlooks for the upcoming season, and tracking how those yields and risks develop over the day-to-day short term and into the long term, enables users to adapt to short-term shocks and plan for long-term resilience.

How to Achieve Climate Resilience

With climate risks accelerating, business leaders can’t afford to take the wait-and-see approach. Building climate resilience will ensure companies are prepared to turn climate risks into an opportunity and a competitive advantage. Here are five steps we advise our clients to take:

Step 1: Understand Your Exposure to Climate Risks

Start by understanding your company’s exposure to both physical risks (extreme weather events, changing climate conditions affecting operations, infrastructure, and supply chains) and transition risks (new regulations, shifting markets, evolving consumer preferences) specific to your sector and geography.

Then rank these risks by severity and urgency. Address the most immediate and severe risks first, integrating them into short-term planning, while placing less critical risks into medium- to long-term strategic plans.

Step 2: Understand the Adaptation Playbook for Specific Climate Events

Understanding the climate adaptation playbooks that have worked for sub-industries and companies before, during, and after extreme climate events, and under longer-tailed climate trends, like earlier springs and warmer winters, will enable companies to replicate adaptation plans. 

In extreme weather events, there can be multiple sales shifts, both positive and negative, across the course of an event. 

During Florida’s 2022 Hurricane Ian, for example, in the three days leading up to the event, there was a 32% increase in sales in the grocery sub-industry across Florida during the three days preceding the event, resulting in a surge of $309 million. Grocers that have good adaptation plans and were resilient during the storm stood to benefit most from this disaster. 

Step 3: Build Flexibility into Supply Chains and Operations

Understanding the risks you face and how customers might react during a climate-related event or trend will enable you to make long-term plans. 

• Diversify Supply Sources: Identify areas in your supply chain vulnerable to disruptions from extreme weather events. Proactively establish alternative or backup suppliers in lower-risk locations to maintain supply continuity.
  
• Collaborate with Partners: Work closely with suppliers and partners to jointly build resilience strategies. This can involve shared planning, coordinated responses, and mutual support during disruptions.
  
• Operational Preparedness: Develop comprehensive contingency plans for extreme events. This includes:
  
  • Installing backup generators to ensure continuity during power outages.
  • Maintaining appropriate inventory levels of relevant goods and materials.
  • Training employees on crisis response and continuity protocols.
  • Keeping channels of communication open with customers during an event.
    
• Strategic Asset Relocation: For assets located in areas facing unavoidable, sustained climate risks, such as rising sea levels, consider strategically relocating operations or infrastructure to reduce long-term vulnerabilities.

Step 4: Set Clear Climate-Resilient KPIs

To effectively track your climate resilience strategy, establish clear, actionable KPIs. These metrics will help evaluate your resilience efforts, identify areas for improvement, and ensure continuous progress.

Examples of effective climate-resilience KPIs include:

• Percentage or number of critical business assets (percentage of crops assessed, for example) evaluated for climate vulnerability.
• Percentage or number of critical business assets that face climate risks covered by an adaptation playbook (a store-specific response plan, for example)
• Frequency of climate-related scenarios and emergency preparedness tests.
• Regular testing of public communication systems, crisis management networks, and stakeholder outreach protocols.
• Percentage of employees trained to respond effectively to climate-related events.
• Business performance metrics during and immediately following climate events compared to sector peers.
• Time taken to detect emerging climate risks before an event and recovery time to resume full operations afterward.

Regular monitoring and updating of these KPIs and any others enables your company to stay ahead of climate impacts, assess performance of adaptation plans, and continuously improve readiness.

Step 5: Invest in Climate Resilient Technology

Having a tool that provides real-time data to assess upcoming and immediate climate events and their potential impact on product supply and operational continuity, you can answer questions to simplify decision-making and inform long-term strategy. 

Climate resilience is not just about weathering the storm and limiting damage. It’s about preparing, adapting, and building a competitive advantage. It’s about turning climate risks into opportunities.

For every sector, geography, and company, resilience will take a slightly different form. But by understanding your exposure and taking the other steps outlined here, companies can go beyond damage limitation and build a competitive advantage. 

Climate Resilience FAQs