2025 in review – Climate resilience

In 2025, climate resilience moved from the margins of sustainability work to its centre of gravity. As climate losses mounted and physical risks became more visible across supply chains, infrastructure, and earnings statements, adaptation was no longer framed as a secondary concern to mitigation. Instead, the year marked a growing recognition that resilience is now a core determinant of economic stability, business continuity, and social wellbeing.

The escalating cost of inaction

The scale of climate-related losses provided a stark backdrop to the year’s conversations. Global climate losses surpassed US$1.4 trillion – and yet most countries still lack comprehensive adaptation strategies. This disconnect between impact and response emerged as one of the defining tensions of 2025. While the financial toll of extreme weather, droughts, and chronic climate stressors is rising rapidly, adaptation continues to lag behind mitigation in policy focus and funding.

From a corporate perspective, the risks became harder to dismiss. Analysis suggested that physical climate risks could cost firms as much as US$1.2 trillion annually by 2050, cutting directly into operating margins and asset values. Another estimate put around 7% of corporate earnings already at risk from climate impacts, underscoring that resilience is no longer a future concern but a present one.

From abstract risk to operational reality

In 2025, climate risk increasingly showed up not as a long-term scenario but as an immediate operational challenge. Climate hazards – from heat stress to flooding – were identified as growing threats to data centres and the resilience of digital businesses, exposing vulnerabilities in systems that now underpin most of modern life.

At the same time, the impacts on food systems became more visible and more personal. Farmers reported reduced productivity and income losses linked directly to climate change, reinforcing concerns about food security, rural livelihoods, and price volatility. These findings aligned with broader warnings from the UN, which described drought as a “slow-moving global catastrophe” and called for significantly greater investment in drought resilience.

Together, these signals pointed to a common conclusion: climate impacts are no longer isolated shocks but systemic stresses affecting multiple sectors simultaneously.

The resilience investment case strengthens

One of the most important shifts in 2025 was the strengthening economic case for adaptation. Research from the World Resources Institute suggested that climate adaptation investments can deliver returns of up to tenfold over a decade, reframing resilience as a value-creating strategy rather than a defensive cost.

This reframing began to influence corporate behaviour. Rather than treating resilience as an insurance-style expense, leading companies increasingly positioned it as a source of long-term competitiveness, supply security, and brand protection.

Corporate resilience strategies materialise

Concrete examples of this shift appeared most clearly in resource-intensive sectors. Consumer goods group Suntory announced nearly US$1 billion in investments to develop climate-resilient berry production for its Ribena brand, highlighting how adaptation is becoming integral to agricultural sourcing strategies.

In fashion and luxury, Kering launched a water resilience strategy aimed at addressing growing water stress across its supply chains, recognising water availability as both an environmental and business continuity risk. These initiatives illustrated a broader trend: resilience planning is moving deeper into value chains, beyond corporate headquarters and into raw materials, manufacturing regions, and local ecosystems.

Notably, these efforts were less about incremental efficiency gains and more about structural adaptation — changing where and how materials are sourced, investing in ecosystem health, and building long-term partnerships with producers.

A widening adaptation gap

Despite these positive signals, 2025 also exposed a widening gap between leaders and laggards. While a handful of companies and regions advanced resilience strategies, many countries and businesses remain underprepared. The disparity is particularly acute in vulnerable regions, where adaptation needs are highest but resources and institutional capacity are limited.

This imbalance raises difficult questions for sustainability professionals. As climate impacts intensify, resilience is becoming not only a technical or financial issue but a matter of equity, responsibility, and risk transfer across global value chains.

Resilience as a strategic imperative

By the end of 2025, climate resilience had clearly crossed a threshold. It is no longer framed as a niche concern for insurers or infrastructure planners, but as a strategic imperative touching earnings, assets, and long-term viability. The year’s news made one point repeatedly clear: the costs of delayed adaptation are rising faster than the costs of action.

For sustainability leaders, the challenge ahead is not just to quantify risk, but to embed resilience into investment decisions, sourcing strategies, and governance frameworks — before climate impacts further narrow the space for choice.