January 15, 2025 Building Resilience Amid Intensifying Climate Risks

Discover strategies to boost safety, build resilience, and turn readiness for climate challenges into opportunities for stronger operations.

By David Picton, Senior VP ESG & Sustainability

The North American 2024 hurricane season set new benchmarks for intensity and destruction, underscoring the urgent need for businesses to tackle escalating climate risks with proactive strategies. Hurricanes like Helene, which caused an unprecedented $60 billion in damages, disrupted global supply chains and upended communities far beyond coastal areas, have proven that resilience – encompassing operational stability, financial durability and reputational safeguarding – is no longer optional for organizations.  Moreover, hurricanes are just one of the challenges from intensifying climate risks – the recent devastating and tragic Californian wildfires were also inextricably linked to a changing climate. Companies that fail to adapt to these escalating risks may find themselves unprepared for the next crisis, while those that integrate safety and sustainability practices into their operations can better navigate challenges and even uncover opportunities.

The Cost of Unpreparedness

The devastation from Hurricane Helene extended beyond immediate physical damages. Inland manufacturing hubs, once considered safe from storms, faced unprecedented disruptions, forcing businesses to confront vulnerabilities they had previously overlooked. For small and medium-sized enterprises (SMBs), the impact was especially severe. With thinner margins and fewer resources, SMBs struggled to recover quickly, leaving them vulnerable to prolonged operational disruptions.

In 2024, insured losses from natural catastrophes, including hurricanes, exceeded $135 billion globally, highlighting the financial stakes for businesses unprepared for climate risks. The Atlantic hurricane season alone accounted for approximately $200 billion in total economic losses, making it one of the costliest on record. (WSJ; NY Post)

Many organizations still approach disaster preparedness as a standalone initiative, often siloed within specific departments. Yet, climate risks like hurricanes don’t impact businesses in isolation; they ripple across operations, supply chains and workforces. Without a comprehensive strategy that integrates safety and sustainability, companies risk not only financial losses but also long-term reputational damage, significant operational disruption and potentially even risks to the safety of their people.

Why Resilience is a Business Imperative

The concept of resilience goes beyond weatherproofing facilities or having an emergency response plan. It’s about embedding adaptability into the organizational DNA to anticipate, withstand and recover from disruptions—be they natural disasters, supply chain challenges, or regulatory changes.

For example, diversifying supply chains to reduce geographic dependencies can mitigate risks from localized disasters. Similarly, investing in renewable energy solutions not only supports ESG (environmental, social, and governance) goals but also ensures operations can continue during power outages. These actions don’t just prepare businesses for extreme weather; they make organizations more competitive and better positioned for future challenges.

Safety and ESG: A Unified Approach

At the core of resilience is the integration of safety and ESG principles. When these frameworks are aligned, they create a holistic approach to managing risks while driving operational efficiency. Consider chemical management systems: these tools ensure compliance with safety regulations, reduce environmental impact and minimize health risks for employees. During crises like hurricanes, having such systems in place can mean the difference between a contained incident and a catastrophic spill.

Investors are increasingly drawn to companies that demonstrate proactive risk management and sustainability. Transparent ESG reporting signals accountability, which builds trust among stakeholders. For customers, ESG-aligned practices reflect a company’s values, enhancing brand loyalty.

Lessons from the 2024 Hurricane Season

The challenges of this year’s hurricane season provide a roadmap for businesses to strengthen their resilience in 2025 and beyond. Three key lessons stand out:

1. Break Down Silos: Disaster preparedness must be a cross-functional effort. Too often, safety, sustainability and operations teams work in isolation, resulting in fragmented responses. By fostering collaboration, businesses can develop comprehensive risk management strategies that address vulnerabilities across the board.
2. Prioritize Workforce Safety: Frontline workers are often the most affected during extreme weather events, yet their safety needs are sometimes overlooked. Providing these employees with real-time safety data, clear communication channels and robust training ensures they can respond effectively during crises. Post-crisis support, such as mental health resources, new training and investment into community restoration programs also fosters employee loyalty and well-being.
3. Leverage Technology for Predictive Insights: Advances in technology have revolutionized how businesses prepare for and respond to climate risks. Predictive analytics, for instance, can help identify high-risk areas for flooding or storm surges, while IoT-enabled sensors monitor critical infrastructure for potential failures. Digital twins—virtual replicas of physical assets—enable companies to simulate disaster scenarios and optimize emergency responses.

This year’s hurricanes also underscored the unpredictable nature of storm paths and intensities, with several storms defying forecasts and rapidly intensifying. For example, Hurricane Milton rapidly intensified into a Category 5 hurricane, with a significant pressure drop in just 7 hours making it the most rapidly intensifying hurricane in nearly 20 years. Businesses need to remain agile in their planning, ensuring that preparedness strategies account for these shifting patterns. (NY Post)

The Role of Collaboration

Resilience is not a solo endeavor. Businesses, governments, and communities must work together to develop shared solutions. Public-private partnerships can create regional risk assessment tools or community-based emergency response programs that benefit all stakeholders. By pooling resources and expertise, organizations can amplify their impact, protecting both economic interests and societal well-being.

Turning Risks into Opportunities

While the increasing frequency and severity of hurricanes pose undeniable challenges, they also present opportunities for forward-thinking businesses to differentiate themselves. By adopting a proactive approach to resilience, companies can:

• Attract Investment: Investors prioritize companies that demonstrate preparedness and a commitment to sustainability. Proactively addressing climate risks enhances a company’s appeal, particularly as ESG metrics become central to investment decisions.
• Enhance Customer Loyalty: Consumers are increasingly drawn to businesses that align with their values, including environmental stewardship and social responsibility. Transparent ESG practices and a reputation for resilience build trust and loyalty.
• Foster Innovation: Adapting to climate challenges often requires creative solutions, from developing sustainable products to rethinking supply chain strategies. These innovations can drive growth and open new market opportunities.

Practical Steps Toward Resilience

To build a weather-resistant workplace, businesses should:

• Conduct Comprehensive Risk Assessments: Evaluate vulnerabilities across operations, supply chains and workforce safety. Use these insights to prioritize investments in risk mitigation.
• Integrate Safety and ESG Goals: Align safety protocols with ESG objectives to create a unified strategy for resilience. This might include implementing chemical management systems or adopting renewable energy solutions.
• Invest in Technology: Utilize predictive analytics, IoT-enabled sensors and digital twins to anticipate risks and streamline emergency responses.
• Engage Stakeholders: Foster collaboration across teams and with external partners to ensure preparedness and build a culture of resilience.

The Road Ahead

As climate risks continue to escalate, the time for action is now. The 2024 hurricane season has shown that resilience is no longer just a buzzword; it’s a business imperative. Companies that embrace safety and sustainability as integral to their operations will not only weather future storms but also position themselves for long-term success in an increasingly uncertain world.

By embedding resilience into their DNA, businesses can transform today’s challenges into tomorrow’s opportunities, ensuring they thrive no matter what storms lie ahead.

About the Author:
David Picton is the senior vice president of ESG and sustainability for EcoOnline Global, a provider of EHSQ software solutions. The Situation Room is EcoOnline Global’s LinkedIn newsletter that discusses climate-driven hazards and explores how businesses can prepare and respond to them.

Read more from the author:

EHS Today, Weather-resistant Workplace Resilience – November 20, 2024

Net Zero – What Is All The Fuss About? | EcoOnline – June 23, 2023

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