By Gerrit Weideman
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October 7, 2025
“Taking bold action on climate change simply makes good business sense. It's also the right thing to do for people and the planet.” (Richard Branson) Climate change impacts the fundamentals of business operations. Rising heat affects productivity, floods and storms damage infrastructure, droughts disrupt supply chains, and new regulations increase compliance costs. Many leaders still believe their sector will be spared, but no industry is truly insulated. Just as one-third of startups fail because they never properly defined their target market, businesses that fail to assess climate risks may find their models undermined by forces beyond their control. The message is clear: failing to future-proof your business, will result in extremely hard times ahead. Start with the risks you’re facing The first step is to identify which climate risks could most directly affect your operations. These can be physical (think floods, wildfires, and extreme temperatures), or transitional, such as regulatory changes and shifts in customer expectations. According to the latest prediction models, South Africans can expect a hotter, more erratic climate with the country warming at about twice the global average. This means more very hot days that will hurt worker productivity and equipment reliability. On top of this, the country is also experiencing heavier downpours with increased flood damage. These damaging floods, such as those seen KwaZulu-Natal in April 2022 and the Western Cape in September 2023, will result in enormous insurance and economic losses and prolonged business disruption. Despite the flooding, the country is also not in the clear when it comes to water stress. The 2015–2018 Cape Town “Day Zero” drought was devastating for car wash businesses but a boon for borehole drillers. Day Zero may have been avoided, but there will be more droughts in the future. All of these issues can lead to stock and agriculture failures, infrastructure collapse and process interruptions. A lack of water, for example, creates cleaning and hygiene issues as well as lower staff productivity. Insurers in SA have been reporting increasing weather losses and rising catastrophe claims, which will continue to feed through to higher premiums and excesses and tougher underwriting in high-risk zones. You can only build a realistic plan once you understand exactly where your exposures lie. Build a climate profile for your business Once you understand the risk categories, create a profile detailing how they intersect with your company. You need to consider your location, your sector, your suppliers and your employees. A warehouse on a floodplain carries different risks from a retail store in a heat-stressed city. Manufacturing firms may depend on inputs that are vulnerable to drought or fire, and employees may struggle in adverse weather conditions. Many exposures sit within the supply chain, where a small disruption upstream can ripple through global markets. For example, higher than usual temperatures may result in crops failing, or greater costs for HVAC and cold logistics services. Have you factored in these costs being passed on to your business? This profile should be updated regularly, as conditions, regulations, and technologies evolve and more is learnt about the severity of future weather patterns. Segment your strategy Not every part of your business will need the same response. While operations may require investments in resilient infrastructure or more efficient energy use, supply chains might need diversification or tighter contracts with suppliers to ensure continuity. Products and services may need to change as customers shift their preferences toward sustainable options. Segmenting your approach enables you to focus on the areas that matter most. Use data to drive decisions Climate planning is most effective when it’s based on evidence rather than assumptions. It is vital that any planning you do is based on the data from climate models, insurance assessments, and financial analyses. Tracking information like rising temperatures, energy costs, and new compliance regulations will turn climate risk from an abstract concern into a measurable factor in your strategy. In South Africa, municipal climate plans are being adjusted to redraw floodplain rules and heat-safety requirements. Is your business going to even be compliant when they come in? Talk to your stakeholders Your customers, employees, suppliers, and investors are able to offer different perspectives that could keep you ahead of any climate disasters. Customers can tell you what matters most in their purchasing decisions, employees may note practical changes to streamline daily operations and suppliers can share concerns that could highlight problems you had not foreseen. Talking to all of your stakeholders is more important than it’s ever been. Climate planning is an ongoing process Preparing for climate change is not something you can set and forget. It requires regular review and adjustment as risks, regulations, and technologies change. Businesses that take structured action now don’t just reduce their exposure – they’ll also become more attractive to capital investment and build long-term resilience. Climate change is already reshaping the way companies operate. The question is no longer whether it will affect your business but whether you are ready to respond. Speak to us if you need help allocating budget for climate resilience strategies.
