The Urgent Shift: Why Irish Businesses Must Embrace Climate Resilience
As climate change intensifies, the impact on businesses is becoming a critical issue that extends beyond merely reducing emissions. While cutting emissions remains essential for ethical and regulatory reasons, companies must also prepare for the broader ramifications of climate change. This involves adapting to extreme weather events that threaten to disrupt operations and supply chains.
Irish businesses face a spectrum of challenges due to severe weather, from droughts and floods to storms that can interrupt infrastructure. These challenges are not isolated to individual companies but affect suppliers, distributors, and utility providers, creating a web of risks that can have a far-reaching impact.
Barry O’Dwyer, climate change lead at KPMG in Ireland, highlights the financial repercussions of such events: “Climate change is a direct balance-sheet and operational risk. Severe weather events like Storm Éowyn in January 2025 generated over €301 million in insurance claims, with business claims accounting for a significant 55 per cent of the overall cost. The average business claim stood at €17,000, compared to €5,745 for household claims.”
Kathleen O’Regan, senior executive for sustainability solutions at Enterprise Ireland, underscores the necessity for businesses to recognize climate change as a significant risk: “Climate change is already a significant business risk for Irish companies. Businesses are facing both physical risks, such as flooding and other extreme weather events, and transition risks arising from changing regulations, technologies and customer expectations.”
Despite progress in understanding these risks, many businesses are still lagging in implementing effective climate adaptation strategies. O’Dwyer notes, “While EU reporting standards like CSRD [the Corporate Sustainability Reporting Directive] have driven progress in adaptation planning, a significant gap remains between understanding exposure and taking physical adaptation measures.”
O’Regan adds, “The biggest gap is often a lack of understanding of how climate risks could affect operations and supply chains and the financial impact this could have on the business.” To address these challenges, businesses need to move beyond merely identifying risks and take actionable steps to mitigate them.
O’Regan advises companies to assess their vulnerability to extreme weather and other climate impacts, suggesting improvements in resource efficiency, investment in new technologies, and diversification of suppliers as potential strategies. O’Dwyer emphasizes the importance of climate risk assessments to map exposure and vulnerabilities, recommending practical actions such as upgrading infrastructure and establishing emergency continuity plans.
The call to action is clear: businesses need to integrate climate resilience into their everyday operations rather than treating it as a separate initiative. Stephen Browne, head of public affairs at Dublin Chamber, explains, “More frequent severe weather events can disrupt transport networks, energy and water supplies, and digital connectivity, with knock-on effects for businesses, their employees and supply chains.”
Browne stresses the importance of a holistic approach, incorporating both business and national infrastructure needs: “Companies can take steps to protect their operations and strengthen their supply chains, but they also depend on reliable national infrastructure.”
Investing in climate resilience is not merely an overhead but a strategic necessity for ensuring long-term enterprise value. As O’Dwyer puts it, “Adaptation should therefore be viewed not only as a response to climate risks, but as a strategic investment in resilience, economic stability and long-term prosperity.”
Ultimately, the cost of inaction could far exceed the investments required to prepare for climate-related disruptions. As O’Regan concludes, “The question is no longer whether businesses can afford to invest in climate resilience, but whether they can afford not to.”
Enterprise Ireland offers support to companies looking to enhance their resilience, emphasizing that resilience is crucial for both short-term stability and long-term viability. O’Dwyer warns against complacency: “Don’t wait for the next storm or flood. The best time to make resilience at the core of everyday operations was yesterday. The second best is right now.”
Original Story at www.irishtimes.com