Climate risk is no longer a distant projection; it is a present-day financial reality. Insured losses from climate-related disasters were forecast to reach as much as $145 billion in 2025, a 6% increase from 2024. This steady rise reflects the mounting economic toll of a warming world and reinforces the urgency for businesses to adapt.
The report Business on the Edge: Building Industry Resilience to Climate Hazards, produced by the World Economic Forum in collaboration with Accenture, offers a detailed analysis of how climate risks are reshaping the global business landscape. It provides guidance for boards, investors, senior executives and operational leaders on how to anticipate disruption and build resilience into strategy and operations.
The study evaluates fixed asset exposure across 20 global industries, analysing seven major climate threats: extreme heat, wildfires, drought, water stress, tropical cyclones, coastal flooding and river flooding. It also assesses supply chain vulnerability across five interconnected socio-economic systems: agriculture, the built environment, technology, healthcare, and financial services.
Rising exposure in major economies
Among the most vulnerable countries, China stands out due to its susceptibility to flooding, typhoons, and prolonged heatwaves. In 2023 alone, climate-related disasters generated economic losses of CNY 308 billion (nearly $45 billion) in China.
These figures illustrate that climate hazards are not simply environmental challenges; they represent systemic economic risks that threaten growth, disrupt operations and erode long-term competitiveness.
While public sector investment plays a major role in mitigation and disaster response, companies must integrate resilience directly into their business models to effectively address enterprise-level risk.
Climate risk and profitability
Looking ahead, the financial implications intensify. By 2035, annual fixed asset losses among listed companies worldwide could reach $560 billion and $610 billion, depending on emissions trajectories. By 2055, losses could exceed $1.1 trillion per year.
These impacts translate into a projected annual reduction in average company earnings of 6.6% to 7.3% by 2035. For highly exposed sectors, including utilities, telecommunications and travel, earnings risk could surpass 20%. Extreme heat is expected to be the single largest driver of profitability losses.
Yet physical asset damage is only one part of the equation. Climate volatility also disrupts supply chains, reduces labour productivity, alters consumer demand patterns and intensifies resource scarcity. In combination, these pressures threaten every link in the value chain.
Scientific warnings about potential tipping points, such as the collapse of the polar ice sheet or shifts in ocean currents, add further uncertainty. These systemic changes could trigger cascading economic and ecological disruptions, amplifying financial risk.
The strategic question for business leaders is clear: how can companies adapt, remain competitive and continue to grow in an increasingly unstable climate?
Foundations for resilience
China’s approach offers insight into how coordinated investment can strengthen climate preparedness. Between 2019 and 2023, national funding for disaster prevention and emergency response grew at an average annual rate of 8.85%. In 2024, CNY 334 billion (approximately $46 billion) was allocated to reinforce disaster management systems.
The country also operates one of the world’s most comprehensive meteorological monitoring networks, including multiple satellites, hundreds of weather radars and tens of thousands of surface observation stations. Combined with advanced forecasting models and artificial intelligence, these systems support sophisticated early warning mechanisms.
However, public infrastructure alone cannot shield businesses from climate disruption. Corporate resilience requires embedding adaptation into sourcing strategies, production processes, logistics planning and customer engagement.
Climate resilience is not a compliance exercise — it is a strategic transformation.
Resilience as Competitive Advantage
Companies that act decisively today will be better prepared to meet evolving regulatory requirements, investor scrutiny and customer expectations. More importantly, they will be positioned to absorb shocks, adapt sustainably and pursue growth even in volatile conditions.
Climate resilience should not be viewed as a costly investment process. Instead, studies show that every dollar invested in adaptation can generate avoided losses and create long-term value.
In an era defined by uncertainty, resilience becomes a defining differentiator.
The transition to a +1.5°C world is underway. Businesses now face a choice: react to disruption as it unfolds, or proactively shape a more stable and sustainable future. Nations that embed resilience at the heart of strategy and collaborate across borders and sectors will not only protect their assets and reputation but help lead the next phase of global economic transformation.