Five strategic actions global companies can take to manage climate risk

As global businesses confront the realities of a hotter, more volatile world, the challenge has shifted from planning for climate change to managing climate risk in real time. Moderator of the Climate and Nature Risk Management for Business webinar, that features panellists from PepsiCo, Mondelēz and Kenvue, Dr Scott Kelly, SVP Model Development and Analytics at Risilience, summarises best steps to navigate climate in 2026 for business success.

Featuring a panel of industry experts, including David Grant, Senior Director, Global Climate & Water Solutions, PepsiCo, Michael Weber, Senior Director Sustainability, Mondelēz International and Jennifer Duran, Global Head of Sustainability, Kenvue, our on-demand webinar recording features real-world insights from sustainability leaders working on the frontline of global business.

Exploring findings from the Climate and Nature Risk Report 2025, commissioned by Risilience and conducted independently by Censuswide in August last year, the webinar shines a light on where climate and nature risk lands on the corporate business agenda.

While 96% of large corporations are experiencing heightened uncertainty due to economic, geopolitical and environmental shocks, 90% now see climate risk as a core strategic and financial concern.

These five strategic actions will define the future of business resilience in the climate economy.

Quantify physical risk at the asset and supplier level

Extreme weather events have caused more than $3.6 trillion in damages since 2000, disrupting supply chains and eroding asset values. To build true resilience, firms must quantify the vulnerability of facilities and suppliers under 2°C and 3°C scenarios, not just aggregate hazard scores. That means mapping exposure to flooding, heat stress and drought across value chains, and sequencing adaptation investments where risk is most material.

Practical measures – site hardening, flood defences, redundancy for critical assets, early-warning systems – deliver rapid returns by preventing downtime and protecting revenue. Collaboration with suppliers to improve data quality and continuity planning remains essential, particularly across Scope 3 emissions networks.

Stress-test transition risk under multiple pathways

Transition risk is accelerating even amid policy volatility. Carbon pricing now covers around 70% of global GDP and is tightening across major markets. Emissions-intensive sectors could face costs equal to 50% of EBITDA by 2030 through carbon prices, asset write-downs and demand shifts.

Businesses should conduct dual-track stress testing that considers both fragmented and rapid transitions. This enables boards to anticipate nonlinear shifts, such as sudden regulatory tightening or technology breakthroughs, and align investment strategy accordingly. Firms that integrate these insights into capital allocation will be better prepared for abrupt policy convergence on 1.5–2°C targets.

Reframe climate investment as value creation

Many businesses still view decarbonisation and adaptation as cost centres. In reality, the business case is stronger than perceived. Risilience data shows that 36% of CapEx is now aligned with sustainability goals, yet 79% of companies still struggle to communicate the value of long-term resilience in financial terms.

Projects that reduce emissions or improve energy efficiency often generate 2–10× benefit-to-cost ratios through avoided losses, lower energy spend and reduced regulatory exposure. Firms should recalibrate hurdle rates to account for volatility, downtime and carbon costs, transforming many “nice-to-have” projects into value-accretive, no-regrets investments.

Move beyond compliance to competitive strategy

The climate economy is scaling into a multi-trillion-dollar opportunity spanning clean energy, mobility and adaptation infrastructure. Early movers are already realising “green premiums” – lower financing costs, stronger brand equity and better access to capital. Cascading carbon targets through procurement can be cheaper than absorbing cost pass-throughs and preserves market access under mechanisms such as CBAM in the EU.

Embedding climate analytics into M&A, product innovation and capital planning transforms compliance into competitive advantage. This is where the Risilience-powered Riise platform helps enterprises quantify risk exposure and model ROI across transition scenarios – turning climate uncertainty into actionable strategy.

Embed climate in governance, reporting and incentives

Only 9% of businesses today have fully embedded climate-risk quantification into financial planning. That must change. Boards need decision-useful metrics on exposure, adaptation spend and credible transition pathways linked to financial KPIs.

Effective programmes assign ownership across business units, tie remuneration to sustainability-linked KPIs and ensure disclosure reflects both climate and nature risk. Transparency builds investor confidence and prepares firms for converging global reporting standards (CSRD, ISSB).

The bottom line

The risk of not acting now outweighs the risk of action. Global companies that make these five moves – quantifying physical and transition risks, reframing climate as value creation, seizing strategic advantage and embedding it in governance – will not only future-proof their business but also lead the next wave of sustainable growth.

• Listen to the on-demand webinar Climate and Nature Risk Management for Business where panellists David Grant, Senior Director, Global Climate & Water Solutions, PepsiCo, Michael Weber, Senior Director Sustainability, Mondelēz International and Jennifer Duran, Global Head of Sustainability, Kenvue, and moderator Dr Scott Kelly, SVP Model Development and Analytics at Risilience discuss how these companies have responded to climate and nature risk in the wake of global geopolitical and economic uncertainty.

• To explore how Risilience and Riise help translate climate and nature risk into financial insight, download the Climate and Nature Risk Report 2025.