Adapting to the changing climate isn’t simply about reducing emissions. Naturally, that aspect is important for businesses for both ethical and regulatory reasons, but the work doesn’t stop there.
Mitigation alone doesn’t get the job done when it comes to external factors. Severe weather can hit Irish businesses in a range of ways, from droughts to floods through to storms causing infrastructure interruptions.
Then there are the indirect aspects to bear in mind. It’s not just your business being hit but those of suppliers, distributors, and utility providers.
This is why businesses need to take a much broader approach to addressing the climate change question beyond merely meeting their own emissions reduction targets. Disruption is becoming more frequent and more expensive; that can’t be ignored by any business that hopes to thrive.
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“Climate change is a direct balance-sheet and operational risk,” says Barry O’Dwyer, climate change lead at KPMG in Ireland. “Severe weather events like Storm Éowyn in January 2025 generated over €301 million in insurance claims, with business claims accounting for a significant 55 per cent of the overall cost. The average business claim stood at €17,000, compared to €5,745 for household claims.”
All of that was from just one storm. Businesses in Ireland are becoming increasingly exposed to both direct physical damage and a wider interruption of services.
“Climate change is already a significant business risk for Irish companies. Businesses are facing both physical risks, such as flooding and other extreme weather events, and transition risks arising from changing regulations, technologies and customer expectations,” says Kathleen O’Regan, senior executive for sustainability solutions at Enterprise Ireland.
“These challenges can disrupt operations, affect supply chains and increase costs.”
That’s why any business taking on a strategy built around resilience needs to consider not only the company itself but also the suppliers and systems it uses.
That, unfortunately, is where gaps begin to emerge. Businesses have become better at working out what impact climate change has on their operations but less so at making the changes required to deal with it.
“While EU reporting standards like CSRD [the Corporate Sustainability Reporting Directive] have driven progress in adaptation planning, a significant gap remains between understanding exposure and taking physical adaptation measures,” says O’Dwyer.
“Many Irish firms still lag in proactive climate adaptation, often treating sustainability as a regulatory box to tick rather than a core commercial strategy.”
There’s a substantial difference between reporting a risk and actually reducing its potential impact. It’s all well and good knowing a vulnerability but that won’t help if that knowledge doesn’t change the decisions being made.
“Many Irish businesses have made progress on climate mitigation but climate adaptation has generally received less attention,” says O’Regan.
“The biggest gap is often a lack of understanding of how climate risks could affect operations and supply chains and the financial impact this could have on the business.”
That’s why there is a need to move from merely identifying the risks towards taking the necessary steps to address them. Of course, it’s best to actually know what those risks are in detail so you can make the best choices.
“Irish businesses cannot afford to take a wait-and-see approach to climate risk. Companies should assess how extreme weather and other climate impacts could affect their operations and supply chains and put plans in place to reduce their vulnerability,” says O’Regan.
“This may include improving resource efficiency, investing in new technologies or diversifying suppliers.”
Think about the actions you need to take. This should involve assessing key locations and partners. From there, work out where there are potential points of failure, what could still work in the event of an interruption, and where you need to invest to limit your exposure.
“Companies should increase their understanding of where and when impacts may occur by executing climate risk assessments to map exposure and vulnerabilities to physical climate risks across facilities and supply chains,” says O’Dwyer.
“Practical actions include upgrading asset infrastructure, diversifying supplier networks to reduce single-point failures, and establishing emergency operational continuity plans.”
There is no one size fits all and a successful approach to adaptation will vary from company to company. Flood protection could be a priority for some, while others may have greater vulnerabilities located with international suppliers.
Whatever the case, climate resilience should become part of everyday operational planning rather than being siloed. Indeed, no company should treat itself as an island in this scenario.
“The impact of climate change on business is increasingly about resilience as well as reducing emissions,” says Stephen Browne, head of public affairs at Dublin Chamber.
“More frequent severe weather events can disrupt transport networks, energy and water supplies, and digital connectivity, with knock-on effects for businesses, their employees and supply chains.”
Browne says businesses need to think holistically, taking in the needs of their partners in the supply chain but also the work done at a national level around infrastructure.
“Companies can take steps to protect their operations and strengthen their supply chains, but they also depend on reliable national infrastructure,” he says.
“That means building greater resilience and additional capacity into our energy, water, transport and communications networks.”
No matter how prepared a business is, there will always be risk. That goes all the way down to employee level, where they may face challenges getting to work or accessing basic utilities like power and water.
That’s why resilience isn’t just a question for a company in isolation but one where it must consider how the infrastructure it depends on operates. Browne says there have been clear signs of progress in this regard.
“For Dublin, the delivery of projects such as the Eastern and Midlands water supply project and the Greater Dublin drainage scheme will be critical. These are not simply projects to accommodate future growth,” he says.
“They are essential to building greater resilience into the region’s water and wastewater systems and ensuring that Dublin can continue to function and compete as the impacts of climate change become more pronounced.”
Of course, any plan will depend on a company’s ability to invest in it, and that requires convincing the board to back it. There is, thankfully, already a strong case for businesses to take this approach.
“Investing in climate resilience is a fundamental strategy for protecting long-term enterprise value, not an optional overhead,” says O’Dwyer.
“Adaptation should therefore be viewed not only as a response to climate risks, but as a strategic investment in resilience, economic stability and long-term prosperity.”
While the upfront costs in such a plan may be off putting, the cost of not acting should something calamitous occur is much greater.
“The question is no longer whether businesses can afford to invest in climate resilience, but whether they can afford not to,” says O’Regan.
“The cost of disruption, whether through extreme weather, supply chain interruptions or business downtime, is often far greater than the cost of preparing in advance.”
Think back to those numbers from Storm Éowyn earlier in this piece. The risk is too great to defer investment. Fortunately, companies don’t have to act alone when taking on this challenge.
“Enterprise Ireland provides a range of supports to help Irish businesses take a proactive approach to managing climate risks, strengthening resilience and enhancing competitiveness,” says O’Regan.
It’s important that companies treat resilience as an investment to secure their futures. That’s no longer a long-term question.
“Resilience is essential not only to long-term viability, but also to maintaining short-term operational and financial stability,” says O’Dwyer.
Don’t wait for the next storm or flood. The best time to make resilience at the core of everyday operations was yesterday. The second best is right now. The risks won’t wait around for you to make up your mind.
