The urgency of responding to climate change related risks has increased because the rate of increase in average global temperatures is accelerating while organizational dependencies have become more tightly coupled and less tolerant of disruption. Just-in-time supply chains, centralised technology platforms, and highly optimised operating models have reduced slack and redundancy across many sectors. At the same time, regulatory and stakeholder expectations have evolved. Financial regulators now expect firms to understand and disclose climate-related risks; and insurers are actively reassessing exposure in climate-vulnerable regions.
Some organizations have been able to adapt quickly to become resilient to these challenges. However, for senior management, climate change increasingly represents a strategic risk to value creation rather than a ‘mere’ corporate responsibility issue, as it has been historically. For business continuity and resilience practitioners, it presents a challenge to ensure that long-term, systemic threats are addressed within frameworks that have historically focused on discrete, time-bound incidents.
Climate change issues for business continuity and resilience practitioners
One of the principal challenges for practitioners is overcoming the perception that climate change (1) is a future problem. This perception persists despite growing evidence of present-day operational impacts. Effective engagement with management requires reframing climate change as an amplifier of existing risks rather than a new category of threat – despite its systemic nature.
Practitioners would be advised to explicitly link climate drivers to familiar risk scenarios already recognised within organizational risk registers, such as site unavailability due to flooding, extended utility outages during heatwaves, or transport network failures following extreme weather. This approach aligns with DRI’s Professional Practice 2, which requires the identification of risks from natural phenomena and the evaluation of their probability, severity, and rate of development.
Quantification is also critical for senior executive teams. Where possible, climate risk should be expressed in both operational and financial terms, including estimated downtime, recovery time objective breaches, and increased recovery costs. External data sources, such as national meteorological agencies and insurer loss databases, provide credible evidence to support these assessments. Presenting climate risk through scenario-based analysis rather than via abstract narrative also helps to improve executive understanding and decision-making.
Cost benefits of proactive vs reactive approaches to resilience
There is strong evidence that proactive investment in resilience delivers materially better outcomes than post-event recovery spending. The US Chamber of Commerce estimates that each $1 invested in disaster preparation saves $13 in economic costs, damages, and cleanup. For organizations, proactive measures such as site hardening, diversified sourcing, and resilient technology architecture reduce both the likelihood and impact of disruption.
From a business continuity perspective, proactive investment also reduces recovery complexity. Reactive responses to climate-driven incidents often involve constrained supplier markets, broken supply chains, labour shortages, and inflated costs due to concurrent regional impacts. Such conditions can render recovery strategies obsolete if they assume normal market availability.
Business continuity and resilience practitioners should also review DRI’s Professional Practice 4, as it explicitly requires professionals to assess the cost of implementing continuity strategies against the value of the assets and processes being protected. Climate risk strengthens the business case for investment by increasing the expected frequency of disruption events and potentially reducing the viability of informal workarounds. Practitioners should incorporate climate-adjusted loss expectancy into cost benefit analyses, rather than relying purely on historical incident frequency.
Aligning business continuity planning to long-term climate risk
As highlighted in the previous section, traditional business continuity planning often assumes a return to baseline conditions following disruption. Climate change challenges this assumption. Certain hazards, such as chronic flooding or extreme heat, may progressively degrade site viability or workforce availability over time, as well as incur increasing costs as frequency increases. As a result, resilience planning should extend beyond short-term recovery towards more adaptive strategies.
Risk assessments should incorporate forward-looking climate data, including medium- and long-term projections, as well as worst-case scenarios. This approach is becoming increasingly supported by publicly available climate datasets and scenario frameworks developed for financial stress testing. For practitioners, the objective is not to predict specific events but to understand how risk profiles evolve across medium- to long-term periods.
Business impact analyses (BIAs) should also be reviewed to ensure that criticality assessments remain valid under changing conditions. Processes previously deemed non-critical may move to become critical if climate impacts constrain alternative delivery channels or impact workforce mobility. Any changes to the BIA should be communicated to senior management, and their input sought.
Supplier considerations in a climate-stressed environment
Supplier vulnerability represents one of the most significant climate-related continuity risks. Extreme weather events are now regularly affecting entire regions and, in many cases, disrupting multiple tiers of supply simultaneously. Single-source dependencies, geographic concentration, and limited supplier transparency all add to this exposure.
Practitioners should work with procurement and supply chain functions to integrate climate resilience criteria into supplier risk assessments. This includes evaluating suppliers’ own business continuity capabilities, physical location exposure, and reliance on climate-sensitive infrastructure such as ports or energy grids. Contractual provisions should require notification of any operational disruptions and evidence of resilience planning. Risk should be assessed throughout the supply chain, beyond first-party suppliers and tier 1 suppliers. Many organizations engage with key suppliers for joint exercising of scenarios to evaluate both organizations’ business continuity strategies.
As per DRI’s Professional Practice 4, supplier dependencies must be explicitly reflected in recovery strategy selection. Contingent business interruption scenarios should be tested using realistic assumptions about concurrent regional impacts, rather than a single, isolated supplier failure. For physical products where substitution is not feasible, inventory buffering or strategic stockpiling may be justified. However, for other suppliers (e.g. data centre providers), backup providers in regions outside areas affected by similar weather patterns could be considered. Furthermore, changing climate patterns mean that even traditionally temperate environments can be impacted by extreme weather. For example, a 40 degree centigrade heatwave in London, UK, caused data centres used by both Oracle and Google to go down for several hours in 2022. Also note that guaranteed uptime of 99.99% (‘four nines’) still means 53 minutes of potential downtime per year.
Insurance considerations and limitations
Insurance has traditionally been viewed as one of the best solutions for transferring risk for natural hazards. However, climate change is already altering the availability, affordability, and scope of coverage. Insurers are withdrawing from high-risk areas, increasing deductibles, and imposing exclusions for certain climate-related hazards. In some cases, coverage remains available only at levels that do not meaningfully support recovery.
Business continuity practitioners should work closely with risk and insurance teams to understand the coverage assumptions within recovery strategies. Overreliance on insurance without a realistic assessment of claims timelines and exclusions can create a false sense of security. DRI’s Professional Practice 4 explicitly requires the review of insurance coverage as part of strategy selection and cost benefit analysis.
Insurance should therefore be treated as one component of a layered resilience approach rather than a substitute for operational preparedness. Practitioners should also consider how climate-driven changes in insurance markets may affect future recovery viability, particularly for capital-intensive or geographically fixed operations.
Conclusions
For an effective climate resilience strategy, business continuity professionals should embed climate stress testing into existing resilience planning cycles. This includes developing scenarios that reflect both plausible and extreme climate conditions, such as prolonged heatwaves coinciding with power shortages or regional flooding affecting multiple suppliers simultaneously. Scenarios should test not only response capability, but also decision-making under conditions of sustained disruption and uncertainty.
Plans should be reviewed to ensure that assumptions about access, staffing, logistics, and suppliers remain valid under conditions of climate stress. Exercises should increasingly incorporate both cascading and concurrent impacts rather than focusing on single-incident scenarios. Maintenance cycles should also reflect changes in climate exposure, regulatory expectations, and insurance coverage – as per DRI’s Professional Practice 8.
Organizations that adapt their resilience frameworks to reflect the reality of climate change will be better positioned to ensure operational resilience, strong stakeholder relationships, and healthy balance sheets. Those that delay consideration of climate risk could find themselves facing increasing disruption at higher costs and with rapidly reducing strategic options.
The author
Rachael Elliott is Director of Global Strategy and Innovation for DRI International. Rachael has particular expertise in the technology side of resilience, and has a keen interest in how artificial intelligence can help to transform the resilience of organizations. Her research has been used in the UK Parliament to help develop government industrial strategy as well as in the BDO High Street Sales Tracker, which Elliott was instrumental in developing and is still the UK’s primary barometer for tracking high street sales performance. She maintains a keen interest in competitive intelligence and investigative research techniques.
Reference
(1) Climate change refers to long-term shifts in temperature, precipitation patterns, and the frequency and severity of extreme weather events driven primarily by increased concentrations of greenhouse gases in the atmosphere, (https://www.ipcc.ch/report/ar6/syr/).
