The adaptation imperative: How to prepare for tomorrow's climate reality
- By Esther Finidori & Sebastien Dufour
- 20 Nov 2025
- 3 min
“Embedding adaptation into business strategy is essential. Companies must act early to secure lasting resilience: avoiding losses, boosting efficiency, and driving innovation.”
- Esther Finidori, Chief Sustainability Officer
As the world gathers in the Amazon region for COP 30, the UN Climate Change Conference, the focus is shifting: from slowing climate change to mitigating its impacts. Climate change is now a lived reality, and adaptation must take center stage.
- 5-10%of industrial companies annual EBITDA could be generated by physical climate risks
- Up to 18%loss in global GDP could be generated by physical climate risks
- 250,000additional deaths per year could be caused by extreme weather
As its consequences are already reshaping ecosystems and economies, expert organizations agree that inaction is not an option: by 2050, physical climate risks could cost industrial companies 5–10% of annual EBITDA, and cause up to 18% loss in global GDP. Without stronger adaptation, extreme weather could lead to 250,000 additional deaths per year.
While mitigation efforts must continue to be prioritized to curb the anthropogenic greenhouse effect, it’s time to now act decisively to adapt.
Understanding what drives climate risks is key to adapting and building resilience. It’s not just about the hazards themselves, but how exposed and vulnerable we are to them.
Climate physical risk definition(Source: IPCC Sixth Assessment Report)
1. Hazards are events driven by climate change, such as storms, floods, and heatwaves. They are increasing in frequency and severity, making climate scenario analysis crucial for predicting future impacts and preparing accordingly.
2. Exposure refers to the presence of ecosystems, people, assets, and infrastructure in areas prone to these hazards. To better manage exposure, Schneider Electric uses a ‘Threat Severity Index’, a tool made to measure the severity and likelihood of hazards per region.This toolprovides an overview of the top hazard exposures by country and those expected to increase significantly due to climate change.
3. Vulnerability is defined by the Intergovernmental Panel on Climate Change to mean how much a system is susceptible or unable to cope with adverse climate effects, including variability and extremes. By quantifying the value at risk, businesses can make informed decisions on insurance policies and adaptation investments.
Schneider Electric’s risk exposure at year 205 (Source: Schneider Electric, Risilience)
Together, hazards, exposure, and vulnerability shape an organization’s climate risk profile. Managing them effectively leads to resilience: the ability to withstand disruption and recover stronger. And when adaptation measures are holistically integrated across strategy and operations, adaptation becomes not just protection, but a catalyst for innovation and long-term growth.
Using five steps, Schneider Electric integrates physical risk assessment and adaptation solutions into our risk management framework, enhancing resilience across our operations and supply chains.
Climate risk identification
Our Environmental Risks team uses climate science, scenario analysis, and on-site audits to assess site exposure and vulnerability. This quantifies material risks across operations under different climate scenarios.
Vulnerability reduction across the value chain
Our end-to-end resilience plan spans sourcing, manufacturing, delivery, and site-level actions:
- Sourcing: We map our multi-tier suppliers to assess their risks. A detailed risk assessment of materials, equipment, and components – combined with business impact – guides secure sourcing, reduces geographic risk, and shapes long-term strategies.
- Manufacturing: Our ‘Power of Two’ strategy qualifies alternative factories for critical components to ensure supply chain continuity during climate disruptions. By 2025, 90% of critical offers will have dual manufacturing sites, and all critical distribution centers will be able to reroute 80% of flows within five days.
- Delivery: Dynamic control towers monitor traffic and can spot disruptions fast, rerouting flows as needed. We’ve developed a resilience index to keep key sites ready with tested continuity plans.
- Site-level adaptation actions: We invest in solutions tailored to site-specific hazards – like flood gates, water storage, and improved drainage – based on third-party audit recommendations.
Real-time risk detection
Predictive weather analysis and real-time alerts let sites at high likelihood of exposure activate continuity plans – such as rerouting logistics – before disruptions occur. This is critical; projections show that by 2050, 269 of 521 sites may face a high likelihood of exposure to natural hazards like flash floods, heatwaves, water stress, and temperate or tropical windstorms.
Effective risk response
We embed an ‘Identify, Protect, Detect, Respond’ methodology into our Enterprise Risk Management framework. Ongoing reviews ensure readiness to contain risks, implement remediation, and track control effectiveness.
Collaboration and stakeholder engagement
Collaboration is central to our strategy. We work closely with suppliers, industry peers, and research institutions to foster innovation and ensure Schneider Electric remains at the forefront of climate adaptation best practices. We also support our customers with adaptation solutions ranging from climate risk assessment and advisory services to water stress management, electrical grid flexibility, as well as efficiency in data centres and industrial operations.
Acting smart to prepare for what’s already here means embedding climate resilience, as a strategic imperative, into different layers of business. Companies should integrate climate risk assessments into all stages: from investment planning, site-level business continuity to insurance coverage.
But adaptation goes beyond internal strategy – it demands collective action. Schneider Electric has partnered with the World Business Council for Sustainable Development (WBCSD) to promote natural climate solutions and scalable adaptation strategies.
Livelihoods Carbon Funds
In addition to that, as per our Sustainability Essentials program, we aim for all of our sites to deploy local biodiversity conservation and restoration programs by the end of 2025, with 85% implemented as of 2024.
Too often, adaptation is still treated as compliance. But the real value lies in forward-looking action, where avoided losses, improved efficiency, and innovation drive long-term resilience. Businesses shouldn’t underestimate the financial risks of climate change by focusing only on short-term threats, while physical risks and shifting regulations are currently reshaping the business landscape.
COP 30 is a pivotal moment to redefine global climate strategy, not just through mitigation, but through bold, coordinated adaptation. Through science-based assessments, nature-based solutions, and strategic partnerships, we’re committed to leading this shift and turn risk into opportunity.
Because resilience isn’t just about surviving what’s coming, it’s about leading through it.
Latest in Climate and Planet
From ever-more to better: Economic systems change for thriving beyond growth
Lessons from Schneider Electric on its net-zero journey
Inside Schneider Electric’s ambitious decarbonization plan
2025 Global energy outlook: Building resilience in an uncharted market
