Climate change is no longer a distant issue that companies can afford to ignore. It has become an immediate, tangible threat to business continuity and, more critically, to long-term sustainability. Over my 20+ years working in sustainability and ESG, I’ve seen firsthand how climate disruptions don’t just affect operations—they shake the core of a business by impacting its people, its supply chains, and its ability to meet stakeholder expectations. This isn’t just about an environmental issue; it’s about a strategic and integrated ESG risk management approach that can make or break a company’s future.
The need for ESG risk management in business continuity
From an ESG perspective, climate change represents one of the most pressing risks that sustainability professionals need to address today. It’s no longer enough for individual departments to handle their slice of the puzzle. Climate risk needs to be woven into the very fabric of the company’s risk management strategy. Without it, we risk overlooking vulnerabilities in the supply chain, underestimating the impact on workforce stability, or missing critical changes in regulatory landscapes that can affect everything from operations to long-term viability.
In my experience, the companies that succeed in this area are the ones that understand climate risk isn’t isolated into a single department, it touches everything. From finance to HR, from operations to compliance, every part of the organization must be aligned with the company’s ESG strategy, especially in the face of climate change. Resilience isn’t just about having backup plans for assets or facilities; it’s about embedding a mindset of agility and preparedness into the core of the business, driven by robust ESG risk management frameworks.
When disaster strikes, real ESG action
I’ve seen what happens when a business isn’t ready. When a big earthquake hit Mexico, many companies and individuals jumped into action with food donations. But as we quickly realized, the issue wasn’t the availability of aid, it was logistics, there was no way to transport the supplies to the areas in need. That’s when our company stepped in. We didn’t just sit back and donate what we thought would help, we listened, assessed the real needs, and leveraged our transport fleet to ensure that resources made it to the people who needed them most. Our employees even volunteered to deliver the food personally, and other companies followed our lead, mobilizing quickly and efficiently.
This is a clear example of how an effective ESG strategy can make a difference, not just in corporate social responsibility terms, but in business continuity. We didn’t just react; we adapted quickly, integrated our response into our operations, and engaged our workforce in a way that was both strategic and humane. It wasn’t about ticking off a box in a sustainability report, it was about taking immediate, meaningful action that aligned with our company’s values and long-term objectives.
Climate risk is a business risk
For sustainability professionals, the critical takeaway is this: climate risk is a business risk. Whether it’s water scarcity disrupting agricultural supply chains, hurricanes halting operations, or wildfires displacing entire communities, the reality is that climate-related events have the potential to devastate not only your environmental impact goals but also your entire business model.
Sustainability executives need to understand that addressing climate risk isn’t just an environmental necessity, it’s a business imperative. ESG professionals must push for climate risk assessments to be embedded into corporate risk management frameworks, aligning them with operational resilience, supply chain continuity, and human capital strategy.
Employees are key to resilience
One crucial but often overlooked aspect of climate resilience is how it impacts employees. When I worked with farmers during a period of extreme water scarcity, it wasn’t just the crops that suffered—it was the people. Employees living in affected areas faced personal hardships, from water shortages in their homes to increased stress from trying to maintain productivity under harsh conditions. Businesses often focus on operational impacts, but the well-being of employees is directly tied to business continuity.
This was starkly evident during Hurricane Maria. The company at the time wasn’t crippled by the storm itself, but by the fact that its employees were displaced, without homes, and unable to return to work. Supporting employees during such crises isn’t just a matter of ethics, it’s essential for maintaining productivity and resilience. Companies with strong ESG risk management frameworks will already have plans in place to protect their workforce, offering flexible working arrangements, financial support, and psychological aid during times of crisis.
The role of ESG in building community resilience
It’s important to remember that our companies don’t exist in a vacuum. The communities we operate in are integral to our long-term success. Climate resilience needs to extend beyond company walls, and this is where a solid ESG approach shines. Building partnerships with local organizations, investing in community-based solutions, and ensuring that local suppliers are supported in times of need is crucial to a holistic ESG strategy.
During the earthquake in Mexico, our quick mobilization wasn’t just a business decision, it was an ESG-driven response that recognized the interconnectedness of our employees, our business, and the community. Helping the local population recover quickly allowed our operations to bounce back faster as well. This kind of proactive, community-centered approach is at the heart of what true ESG risk management looks like in practice.
A call to action for ESG professionals
For those of us leading ESG efforts, the message is clear: climate risk management is no longer optional. It must be at the top of our agendas, not just in our sustainability departments but across the entire organization. Climate resilience must be built into our business continuity plans, risk assessments, and even employee care programs.
We need to lead with the understanding that our role isn’t just about environmental impact, it’s about ensuring that the entire business can withstand the shocks of a rapidly changing climate. Whether it’s through scenario planning, risk mapping, or fostering collaboration between departments, we must take the lead in making climate risk part of the company’s overall risk management strategy. The future of our businesses depends on it.
ESG isn’t just a framework for managing sustainability, it’s a critical tool for building resilient, adaptable, and thriving companies in the face of climate change. We need to champion this integration now, so when the next disruption comes, we’re ready not just to survive, but to lead.