At the United Nations Climate Change Conference (COP27) in Sharm El-Sheikh, Egypt, climate change adaptation took centre stage alongside mitigation as a global priority. Governments have traditionally driven adaptation, with international and non-governmental organizations also playing important roles.

Business engagement has been limited for various reasons, including a lack of understanding of the risks and opportunities associated with physical climate impacts. Yet businesses are crucial to moving the adaptation agenda forward. Given the accelerating impact of the changing climate experienced today, adaptation is now very much a business imperative. The business case for engaging in adaptation is threefold: 

1. Climate change is impacting business performance. The near-term risk of substantial negative impacts is too large to ignore. A sample of 100 major businesses reported that the financial impacts due to physical climate risks are equal to about 10% of annual sales and 4% of their market value. In this context, adaptation simply means common-sense investments in business continuity that all companies should be making. Many are not.

2. Climate change will create a profound opportunity in many industries, especially as products and services provided by businesses will be needed to mobilize an effective response.

Companies that act now to simultaneously create new value for both business and society stand to be the winners in the new climate economy.