Introduction: Why adaptation matters for corporate boards

by Chapter Zero Fellow Emma Howard Boyd CBE - Chair, ClientEarth; Co-Chair, Climate Resilience for All; Visiting Professor in Practice, Grantham Research Institute on Climate Change and the Environment, LSE; former Chair, London Climate Resilience Review and Environment Agency

Adaptation is the next trillion-dollar industry according to the London Stock Exchange Group in their recently published report, Investing in the green economy. The report includes key insights on adaptation from an investor perspective:

• 34% of listed companies on the FTSE All World Index already mention adaptation in their disclosures, and over 70% of real estate and utilities;
• 25% of green bonds are in areas relevant to adaptation;
• 2,100 companies, with over US$1 trillion in revenues, were identified to supply products and services that contribute to climate adaptation, accounting for roughly one-fifth of the global green economy in 2024. 

These are among many of the critical reasons why engaging with the latest research on adaptation is imperative for boards so that they can provide the strategic oversight their organisations need to not only manage climate-related risks but to also ensure that they are ready to adapt successfully to a changing climate. Alongside understanding the implications of the Climate Change Committee’s (CCC) assessment of the UK’s progress on adaptation as outlined below, there are some key resources that can support board members and non-executive directors to integrate adaptation into their business strategy.

Corporate boards, particularly those of businesses operating in London or with significant ties to the city, should also read the the London Climate Resilience Review. It provides a critical assessment of how climate impacts like floods and heatwaves directly threaten urban business operations, infrastructure, and the well-being of their workforce and customer base. 

The review highlights that these are not just environmental issues but fundamental business continuity and security challenges, urging boards to integrate climate adaptation into their core strategic planning to prevent significant financial losses, service disruptions, and reputational damage. It offers actionable recommendations for all stakeholders, underscoring the necessity of proactive investment and collaboration to build a resilient economy capable of withstanding escalating climate shocks.

The review’s 50 recommendations are directed to various stakeholders, including businesses, highlighting the need for a collaborative, city-wide approach to resilience. Boards can align their strategies with these broader efforts. In essence, the London Climate Resilience Review provides corporate boards with a comprehensive and localised understanding of climate risks and opportunities. By engaging with its findings, boards can ensure their companies are not only prepared for the inevitable impacts of climate change but also positioned for sustainable growth and a competitive advantage in a changing world.

Corporate boards should also read Public First’s research From risk to resilience: The case for flood-resilient communities, economy and growth, which shifts the focus from traditional, often insufficient, risk management to proactive resilience building. This research emphasises that disruption is inevitable and boards must prepare their organisations to absorb and adapt to shocks, ensuring the continuous delivery of “essential outcomes” to stakeholders. It encourages a broader view of risks, moving beyond financial concerns to encompass environmental, social, and operational threats, and highlights the interconnectedness of these challenges in complex systems like supply chains.

Furthermore, engaging with this research enables boards to enhance strategic decision-making by integrating resilience into long-term planning, employing robust scenario planning, and aligning risk appetites with impact tolerances. It also helps boards meet evolving regulatory and stakeholder expectations for operational resilience and effective governance. By understanding the insights from Public First, boards can foster a culture that anticipates and navigates disruption, ultimately bolstering their company's long-term sustainability and societal contribution.

Further recommended reading is signposted at the end of this piece.

Board summary

On 30 April 2025, the UK’s climate advisory group, the Climate Change Committee (CCC) published, Progress in adapting to climate change, its biennial report to Parliament on the UK’s progress in adapting to climate change, in accordance with its mandate under the Climate Change Act 2008. The report assesses the latest evidence on the implementation of the Third National Adaptation Programme (NAP3) based on a set of outcomes needed for a ‘well-adapted UK’. These outcomes look to understand climate-related risk and action priorities across sectors including the built environment and communities; land, nature and food; infrastructure; health and wellbeing; and economy. Overall, of the 46 outcomes considered, the report finds that there is not a single outcome with evidence of ‘good’ delivery on adaptation, sending a stark message that the UK’s progress on climate adaptation has been, and continues to be, inadequate.

According to the CCC, the majority of policies and plans for climate adaptation have not changed since its previous assessment in 2023. Various factors, including policy governance gaps, investment shortfalls, and the lack of consistent monitoring and evaluation systems, have contributed to this. For the private sector, the report highlights uncertainty around whether climate risk reporting - including under the current TCFD framework - is effectively translating into reduced risk exposure and increased adaptation efforts. The CCC highlights the need for more concerted public-private collaboration on clarifying the scope and level of adaptation targets, identifying technology use cases and how these should be prioritised, and determining investment routes for project delivery. This may enable more robust adaptation-related disclosure, helping both the CCC, UK government, and business sector better understand how businesses are using physical risk data in strategic decision making. Data from a Carbon Disclosure Project (CDP) 2023 survey is used to show that around only one in three UK businesses use climate change scenario analysis to inform their business strategy. The CCC’s latest progress findings suggest that a much greater percentage of UK businesses should be preparing for potentially more severe climate shocks.

Figure 2 Assessment of climate adaptation progress in the areas of business and finance (Source: Climate Change Committee).

Without greater efforts to strengthen the resilience of the UK’s infrastructure and economy to extreme weather, the impacts of the climate crisis could destroy about 7% of the UK’s GDP by 2050, which is particularly significant considering the cost of reaching net zero emissions by 2050 is about 0.2% of GDP per year. As shown in the table below, businesses of all sizes across the economy can play a key role in committing to and delivering more proactive responses to climate adaptation risks, and it is in their interests to do so.