Climate Risk Is Business Risk

Climate-related risks pose real operational challenges for businesses. Companies don't need to debate causes to recognize that severe weather, extreme heat, and other climate events can disrupt business operations, damage facilities, and affect supply chains.

Smart businesses already plan for uncertainty and potential disruptions. To assess your company's readiness for climate-related risks, consider these questions:

The Top 10 Questions Business Leaders Should Be Asking

1. Do we have contingency plans for temporary closures or disrupted logistics due to extreme weather?
   Plans for operational continuity can reduce downtime and prevent loss of revenue when disruptions occur.

2. How might a major storm, flood, wildfire, or heatwave affect our ability to operate or serve customers?
   Understanding your physical and service vulnerabilities enables better prioritization and communication strategies.

3. Are our suppliers, transport partners, and contractors prepared for regional disruptions?
   A resilient supply chain reduces delays and helps avoid unexpected shortages in critical materials or services.

4. What actions have we taken to strengthen our facilities—such as improving insulation, drainage, ventilation, or roofing—for climate resilience?
   Physical upgrades today can prevent costly damage tomorrow and may reduce insurance premiums.

5. Do we have reliable backup systems in place, such as generators or battery storage, for power outages?
   Ensuring continuity of power protects equipment, preserves data, and supports safety during disruptions.

6. Are critical equipment, data systems, and inventory stored in locations safe from flooding, heat, or high winds?
   Strategic storage can safeguard essential business assets and reduce post-disaster recovery time.

7. Are we tracking and calculating our organization’s own greenhouse gas emissions and resource use?
   Understanding your environmental footprint supports transparency, can reveal cost-saving opportunities, and is increasingly requested by customers and regulators.

8. Are we budgeting for rising utility and energy costs due to extreme temperatures or energy market volatility?
   Energy forecasting helps maintain profitability and informs efficiency investments.

9. Do we review and update our insurance coverage for climate-related damage and business interruption?
   Insurance gaps can leave businesses financially exposed; regular reviews ensure adequate protection.

10. Are our employees trained and ready to follow emergency protocols and business continuity plans?
    A prepared workforce reduces risk to people and ensures faster recovery and service restoration.