nature sets the operating conditions
3 things companies need to know
published 3.18.26
In a polarized moment, nature stays neutral.
Floods, heat, drought and biodiversity loss don’t check political affiliation before they hit. And as pollution and greenhouse gas emissions increase the frequency and intensity of extreme weather events, nature sets the operating conditions for business, creating disruptions that show up in insurance premiums, infrastructure failures, supply chains and your workforce.
We’ll soon read more about how climate is a business continuity risk as companies publish their CA SB 261 disclosures (voluntarily or through compliance).
For companies trying to operate in a rapidly changing world, resilience becomes a practical piece of strategy. That pays off. Research from the U.S. Chamber of Commerce estimates that every $1 invested in disaster preparedness can save up to $13 in economic losses tied to damage, disruption and recovery. In other words, climate resilience is financially rational.
So where do companies actually start?
Below are three ideas:
1. Resilience is no longer a “nice to have”
A few years ago, resilience lived inside sustainability reports, risk registers or compliance conversations. Today, the question is more operational: “Can the business continue functioning when infrastructure fails, communities are stressed or key inputs are disrupted?”
Hurricanes, winter storms, flooding and extreme heat, all intensified by climate volatility, already affect logistics, water availability and energy reliability. The World Economic Forum consistently ranks climate risks among the top global business threats over the next decade.
This becomes the true measure of resilience: whether a company can weather a storm, both literally and figuratively. Nature sets the operating conditions for business. Resilience is how you adjust.
2. Systems thinking beats prediction
One place companies often get stuck is trying to predict the exact disruption they need to prepare for. But nature doesn’t follow scenarios, and rarely do humans.
What matters for companies is not predicting the precise event. It is understanding how disruption moves through the system that the business depends on. Natural ecosystems offer a useful analogy.They stay resilient because connections between systems are visible and there is flexibility when one part is under pressure. The same principle applies to business operations. Resilience improves when core capabilities are designed with an understanding of their dependencies.
Companies that do this well map the systems their operations rely on: suppliers, logistics networks, utilities, infrastructure and the communities where employees and customers work and live. When those connections are visible, you can see the ripples of disruption across your operations.
The organizations making progress here are modeling climate risk, pressure-testing how their operations hold up when a dependency fails and asking:
Where are critical operations dependent on a single supplier, transport route or infrastructure system?
Where could a disruption cascade across procurement, production and distribution?
And where would additional flexibility, backup capacity or alternative suppliers keep the business running during a disruption?
A Note: Resilience shows up in four places
When companies start mapping how disruption moves through their operations, four areas consistently surface. Most senior sustainability leaders already know resilience matters. The challenge is figuring out where it lives.
We tend to see four areas where resilience shows up most clearly.
Physical- Assets, infrastructure and facilities exposed to climate hazards such as flooding, heat stress, wildfire risk or storm damage.
Financial- Insurance availability, capital access, cost volatility and financial exposure as climate-related disasters increase claims and disrupt supply chains and operations.
Social- Workforce stability, community trust and the conditions that allow employees and local economies to function, as climate events affect housing, transportation and public infrastructure.
Governance- Decision-making speed, accountability and leadership structures that allow organizations to act before disruptions escalate.
Looking at resilience through these four lenses helps teams see where the business is most exposed and where small operational changes can prevent larger disruptions.
3. Where companies can start
A practical place to start is mapping the few operational systems the company cannot function without and understanding what those systems depend on. For many companies, the same core dependencies show up quickly: logistics networks, energy reliability, supplier stability, workforce availability and insurance coverage.
From there, different teams can begin pressure-testing the capabilities they own, such as:
Procurement and supply chain teams can look at supplier concentration, logistics routes and exposure to regions experiencing increasing climate volatility and extreme weather events.
Risk and ERM leaders can examine where physical disruptions could cascade into financial exposure through insurance availability, production delays or inventory volatility.
Product and merchandising teams can evaluate whether key materials or inputs depend on climate-sensitive regions or fragile supply networks.
Retail and operations leaders can assess store locations, distribution infrastructure and workforce conditions that affect day-to-day continuity.
The goal is to understand where the business is most dependent on systems that are becoming less stable. Once those dependencies are visible, resilience becomes a series of practical decisions: diversifying suppliers, adjusting logistics routes, strengthening infrastructure or building contingency capacity where the business cannot afford failure.
A Final Thought
At a moment when climate governance is shifting and operating conditions are becoming less predictable, this kind of work becomes part of responsible business leadership. Yes, companies that invest in resilience are protecting their own operations; they are also stabilizing supply chains, workforces and communities that make those operations possible. And in a volatile environment, that kind of practical stewardship tends to matter most.
by Beverly Popoola
Associate
by Sam Hartsock
Strategy Lead + Cofounder
