'Not once and done': How to build a lasting and investable climate adaptation strategy?

According to the World Economic Forum's (WEF) inaugural Chief Sustainability Officers Outlook 85 per cent of the profession expect climate adaptation to become a bigger global priority over the next three years as the planet starts to 'overshoot' the 1.5C warming threshold and climate impacts intensify.

Separate research by Capgemini has found more than two thirds of executives reckon their organisation now actively prioritises climate adaptation, up from 56 per cent in 2025, while just over three quarters expect adaptation spend to increase over the next 12 months.

But despite this growing awareness, UN Secretary General Antonio Guterres recently warned a 'staggering shortfall' in adaptation finance has become more entrenched over the past year, while efforts to enhance climate resilience remain constrained by institutional and market barriers.

However, as contributors to BusinessGreen's latest webinar stressed, best practices are evolving fast as increasingly comprehensive climate resilience and adaptation strategies emerge at businesses across multiple sectors. Organisations are belatedly realising they have no choice but to try and adapt to a warming world.

For Josie Narramore, climate risk and adaptation lead at engineering and technology solutions firm Equans UK & Ireland, this year's record heat, flooding, and storms have all cemented climate impacts as a cross-business risk and forced firms to think in more detail about the role of risk and resilience in their broader strategies. "Things definitely seem to be changing, and I can imagine going into another winter of storms and flooding will also see that pick up as well," she said. "I think climate risk has definitely reached maturity."

As well as record summer temperatures, on-going drought conditions, and mounting financial losses from the likes of storms and flood damage, Narramore cited regulation and reporting rules - "the stick as opposed to the carrot" - as key to driving businesses improved understanding of climate risks. "I think that's definitely done a huge amount of the heavy lifting," she said.

These trends have driven a greater focus on adaptation across job functions, from sustainability executives and risk managers to facilities directors and finance bosses, and across different geographies. Esther An, chief sustainability officer at Singapore-based City Developments Limited, explained how escalating climate impacts are forcing the property business to apply approaches it would usually reserve for buildings in the tropics to assets much further afield. "Because we are next to the equator, heat is obviously a top priority," she said. "We talk about impacts and adaptation in the Global South but in recent years more Western cities have been hit by similar heat."

Early focus on data, business strategy, and stakeholder mapping

How then should businesses respond to these escalating risks and develop a strategic response? Establishing robust data on risks, impacts, vulnerabilities, and risk appetite, marks the first stage in any successful resilience strategy, which is then followed by work to prioritise projects and investments in line with the wider corporate strategy. Narramore breaks early priorities down into "data", "business strategy", and "stakeholder mapping", stressing that progress hinges on establishing a baseline of robust climate impact data from which scenario analysis and an understanding of financial materiality can be applied to then inform which actions should be prioritised.

"Understanding your risks, your impacts, the vulnerabilities that exist within your organisation, your risk appetite, and where you draw the line or where you want to focus more, is really important before you set a strategy," she explained. Narramore stressed it is then important to get "pretty detailed quite quickly" by going deeper on identified risks and fully understanding the knock-on and cascading impacts they might have.

Gouri Ganbavale, senior consultant at the British Standards Institution (BSI), added that the standards setter outlines how to map supply chain risks and then prioritise action in the regions and departments most at risk, arguing such work represents a crucial component of early adaptation planning. For instance, she said materiality analysis can prove essential in flagging which suppliers are business critical and require higher levels of resilience. From there it is then possible to start identifying "low hanging fruit" and "no harm" actions such as renewable energy installations and low emissions logistics rollouts that can both bolster resilience and cut emissions. 

These early steps also have the potential to lay the groundwork for more detailed feasibility studies, stress testing, and "constant checking" for maladaptation. "Climate adaptation is not once and done," said Ganbavale. "It's a continuous, multi-year programme. It has to be supported financially. It has to be robust enough to last many years. Climate risk is an evolving risk. How is this resilience programme going to stand the test of time as these climate risks evolve?"

How have strategies evolved?

The push to build a far more detailed picture of risk exposure across assets, regions and supply chains, and carefully prioritise them by materiality, risk appetite, budget, and ultimately how important they are to a business has been driven to a large extent regulation, according to Lisa Dittmar, head of environmental sustainability at HCA Healthcare UK. "We are a large UK private company, which means we have to report in our financial statements every year," she said. "That's been a real driver and catalyst that I've been able to leverage to get the senior management to look at and fund adaptation."

Dittmar described the approach to climate adaptation at HCA as "bottom up and top down", explaining how efforts to date have involved risk assessments and mapping assets across geographies to establish where the biggest risk are to be found.

"We employed our insurance broker to have a look at what our risk is across several different climate scenario pathways up to 2050, in order to understand where the cost might be for us," she said. "We also have a business resilience and emergency response planning team that has done boots on the ground mapping of all of the risks - not just climate risk, but climate risks are included in that, as well as things like cybersecurity and terrorism."

Dittmar added that the firm has also integrated climate issues into the regular "tabletop" disaster planning exercises HCA carries out with heads of department and other senior executives. This is all backed by a multi-million-pound capital projects budget to help HCA - which provides private healthcare services across more than 67 locations, 10 hospitals, 22 outpatient centres, and over 800 inpatient beds - maintain buildings in a way that enhances resilience. "It's something where we do a bit every year to increase the breadth and the depth of what we do, and we try and integrate it into the business as much as possible," she said.

Broader open-source data can also assist in adaptation planning, alongside risk insight gleaned from regional, national, or international-level outlooks. Ester An, for instance, explained how City Developments Limited factors the World Economic Forum's (WEF) annual global risk assessment into its approach, and plans to similarly draw upon lessons from Singapore's inaugural national adaptation plan to be published next year.

A business case built on 'co-benefits'

In its Chief Sustainability Officers Outlook, the WEF cites research from CDP which estimates that businesses actively managing supply-chain risk have generated savings of $13.6bn to date, with a further $165bn in potential financial benefits expected to be realised. But in a challenging economic environment, finance directors can remain wary of long term investments in enhanced resilience where returns are hard to quantify and can take years to materialise. Despite eye-catching headline figures, making the business case for investment in climate adaptation remains "tricky", admitted Narramore, who warned how highlighting "avoided costs" alone is unlikely to convince finance teams. As such, demonstrating "co-benefits" from climate resilience strategies is often key to unlocking investment.

Narramore explained that when faced with competing decarbonisation and adaptation budgets, Equans' often advises clients to group both pockets of finance together and emphasise how it is possible to build resilience into "more mature" decarbonisation business cases. "Often there are huge co-benefits from looking at these two things together," she said. An energy efficient building surrounded by nature and featuring heat pumps, solar panels, batteries, and electric vehicle chargers is likely to be lower carbon, more resilient to climate impacts, cheaper to run, and a healthier and more productive place to work.   

Dittmar also highlighted "co-benefits" as key to making a successful business case for climate adaptation, but "with an asterisk" given HCA's need for multiple sources of energy in order to ensure energy supply resilience in critical healthcare settings. "Things like boiler and chiller upgrades absolutely have resilience and decarbonisation angles, where it gets a little more tricky is when we start talking about degasification," she said. "We haven't solved that question yet."

It is work that is on-going. "In our long-term roadmap, we want to move entirely away from gas, electrify it, and move to renewable energy," Dittmar explained. "That's a very standard decarbonisation path. But when you've got hospitals and people on life support having multiple sources of energy is useful from a resilience perspective. The approach we're taking is to degasify the areas that don't need 24/7 uptime. When we get to some of those really critical areas, that's going to be a more difficult conversation."

Learn when things go wrong

While Dittmar recommended drawing upon in-depth climate reporting as a "forward-looking" approach to making the financial case for adaptation, she also stressed the importance of highlighting real world examples of disruptive climate impacts, even if such an approach can feel "a little bit pessimistic".

"We've had operational issues before due to heat, so making sure those stay in people's memory and using those as leverage [is key]," she said. "As humans, I think we forget about things that happened a year or two ago, so we make sure that we keep those at the forefront of our senior leaders' minds."

Dittmar therefore suggested climate adaptation practitioners should have a plan for when things do go wrong, so they can demonstrate the damage extreme heat, storms, and flooding can do and the steps that can be taken to guard against future impacts that could be worse still. "That's thinking about impacts on your customers, colleagues, on the bottom line, and sustainability more broadly," she said. "But usually, it's a financial argument."

Narramore similarly highlighted the importance of making business continuity factors part of the business case for adaptation. "Equans, for example, works with the public sector and the impact of climate risks on hospitals or schools," she said. "They need to maintain operations, and they have a duty of care to patients and students. So that does come into the business case and also comes with a financial metric which we can quantify."

Metrics and 'climate language'

As the old adage goes, 'if you can't measure it, you can't manage it'. However, metrics for climate adaptation have proved difficult to define, meaning practitioners often struggle to identify and articulate opportunities and explain what might constitute high, medium, and lower risks.

For Ganbavale, measuring climate risks and assessing the need for adaptation and resilience measures requires a fine balance of qualitative and quantitative analysis. "When we do climate risk analysis or scenario analysis, you get a lot of quantitative numbers through a lot of modelling exercises," she said. "But outside that, there's a qualitative approach where we look into the site, study what kind of operations happen there, and then study the risk. Ask 'how are floods going to impact operations at this site?' then quantify that piece of information - send out questionnaires or get answers to questions tailored for that site or supplier, and share that with the board."

Climate adaptation gap analysis is an "interactive" part of the overall process for building a strategy, making conversations with everyone from site managers and suppliers to the C-suite imperative. Yet given the diversity of roles and experience throughout supply chains and businesses, it is fair to assume not everyone will have a solid grasp of climate jargon, and therefore using audience-appropriate language to discuss specific hazards is crucial.

"Adaptation is really specifically looking at extreme weather impacts, and I think when you're using language around climate risk and adaptation, thinking about the stakeholders that you're engaging at the time is really important, and adjusting the way that you might refer to that type of risk to those specific stakeholders," said Dittmar. "If I'm on site and I'm working with an operational team member, I might refer to weather impacts or specifically call out flooding or heat waves and then talk about the long-term impacts after that. Whereas, if I'm talking to a sustainability professional, I can typically fall back on 'climate language', and that's relatively well understood and accepted. It's about the stakeholder."

As climate impacts continue to intensify, plenty more stakeholders will have to get a grip on the risks and costs they are facing. The good news is a playbook is emerging that allows businesses to develop more effective climate adaptation strategies and demonstrate that huge commercial benefits can result from enhanced resilience.    

BusinessGreen's webinar - From risk to resilience: How to build an effective climate adaptation strategy - is available to watch on demand here.

• From risk to resilience: How to build an effective climate adaptation strategy was hosted in association with Equans UK & Ireland.