June 25, 2025 (World Economic Forum) –
- The breakdown of Earth’s systems is increasingly hurting corporate profitability, fixed assets, supply chains and societies.
- Businesses that fail to adapt to climate risks could lose up to 7% of earnings every year by 2035.
- China is both at risk from climate-related disasters and leading investments in resilience strategies – a foresighted approach.
Projections indicate that insured losses from climate-related disasters could reach up to $145 billion in 2025, marking a 6% increase from 2024. This upward trend highlights the increasing financial impact of climate change on the global economy and underscores the imperative to act.
The report “Business on the Edge: Building Industry Resilience to Climate Hazards” by the World Economic Forum, in partnership with Accenture, provides a comprehensive assessment of risks and resilience strategies for boards, investors, C-suite executives and operations managers.
The report quantifies the risks to company fixed assets across 20 global industries from seven climate hazards: extreme heat, wildfires, drought, water stress, tropical cyclones, coastal flooding and fluvial flooding.
It assesses supply chain risks across five socio-economic systems: agriculture, the built environment, technology, health and financial services.
Among the countries most at risk, China’s economy faces acute vulnerability to climate hazards due to its exposure to flooding, tropical cyclones and extreme heat.
While public investment is crucial, addressing enterprise-level risks necessitates embedding resilience into business models.
For businesses, these events signal not only environmental risk but also disruptions to growth, operations and long-term competitiveness.
In 2023, climate-related disasters resulted in economic losses of CNY 308 billion, equivalent to approximately $45 billion, in China.
Businesses that invest in adaptation, resilience and decarbonization are already realizing tangible returns. Every dollar invested in climate adaptation and resilience can generate up to $19 in avoided losses, based on data from the Carbon Disclosure Project.
Resilience investments translate into innovation and value creation – themes central to discussions at the Forum’s Annual Meeting of the New Champions, taking place in Tianjin, China, from 23 to 26 June 2025.
By 2035, climate hazards could result in annual fixed asset losses of $560–$ 610 billion globally across listed companies, depending on the emissions scenario.
By 2055, those losses could rise to $1.1 trillion per year. This translates into a drop of between 6.6% and 7.3% in average company earnings every year by 2035.
The risk rises to over 20% in the most exposed industries, including utilities, telecommunications and travel, with extreme heat being the most significant driver of profitability losses.
The threat to these sectors is not limited to their physical infrastructure. Disruptions to supply chains, reduced productivity, shifting consumer behaviour and resource scarcity all point to a future where climate risk could affect every element of the value chain.
Compounding these risks are warnings from scientists about irreversible tipping points in the Earth’s systems, such as the collapse of polar ice sheets or shifts in ocean currents, that could trigger cascading disruptions across ecosystems and the global economy.
For business leaders, this raises a critical question: How can companies adapt, grow and lead in this new reality?
China has made remarkable progress in strengthening its public systems for climate risk management.
Through strategic investments, the country has developed evidence-based tools and foresight capacities to assess and respond to climate hazards effectively.
Between 2019 and 2023, national funding for disaster prevention and emergency response grew at an average annual rate of 8.85%. In 2024 alone, the Chinese government allocated CNY 334 billion or $46 billion to bolster disaster management capabilities.
The country also operates the world’s most expansive meteorological observation system, comprising nine Fengyun satellites, over 500 weather radars and more than 70,000 ground surface meteorological stations.
This infrastructure, combined with advanced weather prediction models and AI-powered forecasting, supports the development of cutting-edge early warning systems, enabling rapid, targeted responses to extreme weather events.
While public investment is crucial, addressing enterprise-level risks necessitates embedding resilience into business models. Climate hazards don’t just threaten buildings and infrastructure – they disrupt sourcing, processing, logistics and consumer demand.
To maintain relevance, each business must identify its unique vulnerabilities and proactively implement adaptation and resilience measures.
Climate resilience is not a sunk cost – it is an enabler of long-term value creation and growth in an increasingly unpredictable world.
To remain competitive and resilient in a world surpassing 1.5 degrees Celsius of warming, businesses must adopt a forward-looking and integrated strategy. The following five actions offer a practical roadmap:
Climate resilience and decarbonization must go hand in hand.
Integrate climate risk into core business decisions and elevate responsibility across the C-suite.
Resilience considerations must inform all capital planning and investment decisions.
Ensure climate resilience and adaptation percolates to every level of the organization and its ecosystem partners.
Businesses need a clear understanding of their physical climate risks. This includes mapping vulnerabilities across the full value chain, from raw materials to final delivery.
Use scenarios aligned with the Intergovernmental Panel on Climate Change and localized hazard data to stress-test critical facilities.
Assign risk oversight to the board level to ensure systemic governance.
Upgrade assets to withstand future climate extremes such as floods, heatwaves and storms.
Examples include installing water-efficient systems in agriculture, retrofitting industrial cooling, or reinforcing energy infrastructure for operational stability.
Invest in capabilities to monitor, understand, predict and act on climate threats in real-time.
Use technologies such as digital twins, AI-enabled forecasts and satellite surveillance to enhance agility.
Partner with scientific institutions to refine local impact data, improving strategic foresight and operational decision-making.
Businesses should partner with suppliers, governments, non-governmental organizations and local communities to develop early warning systems and shared solutions.
This enhances operational continuity and fosters goodwill among stakeholders.
Those who lead on resilience today will be better positioned to meet regulatory expectations, investor scrutiny and customer demands tomorrow.
Resilient companies will be better able to absorb shocks, sustainably adapt and pursue economic growth even in the face of disruption.
Indeed, climate resilience is not a sunk cost – it is an enabler of long-term value creation and growth in an increasingly unpredictable world.
Now is the time to act, not only to prepare for the worst but to lead into the future.
Businesses have a unique opportunity and responsibility to lead the adaptation effort, taking a central role in shaping cross-border investment decisions, driving market innovation and supporting policies that enable long-term resilience.
Companies that act decisively now, in collaboration with actors across the supply chain, will not only safeguard their assets and reputation but also spearhead the next era of sustainable growth.
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