As climate deadlines slip and extreme weather intensifies, many companies are quietly reframing their strategy.
For years, climate talks focused on mitigation – or cutting greenhouse gas emissions to keep global warming under control. Now a new word has moved to the centre of the debate: adaptation.
At November’s UN COP30 climate summit in Brazil, that shift was unmistakable. “There is clearly a change to adaptation,” says Olivier Delbard, professor in the Sustainability Department at ESCP Business School. “At the latest COP that was visible.”
That shift in mindset is especially visible inside companies. As efforts to cut emissions continue to stall, businesses are increasingly asking: if we cannot stop all of the warming, how do we live with it?
“In the business world, there is a general fatigue around mitigation,” Delbard says. “We are missing the targets, and mitigation is not very attractive in terms of potential returns.”
Cutting emissions looks expensive, slow and uncertain, while the financial payoff is hard to measure and even harder to capture in the short term. Adaptation, by contrast, can look like something to invest in, rather than something to cut.
Yet behind that shift is a darker assumption: “There is this feeling that it is too late in a way,” says Delbard, who has worked on sustainability issues for more than 25 years. And that is where the strategic risk begins.
In the business world, there is a general fatigue around mitigation. We are missing the targets, and mitigation is not very attractive in terms of potential returns.
Adaptation is not a substitute
Delbard is clear: shifting towards adaptation must not mean giving up on cutting emissions. That would be a mistake, he argues. Without deep cuts in emissions, global temperatures could rise by several degrees by the end of the century.
At that point, adaptation becomes harder – and in some places, impossible. “The most vulnerable countries are in the developing world,” Delbard notes. “For many of them, adaptation would be extremely difficult. Some low-lying countries are already facing existential threats.”
For global companies, this is not a distant moral question. It is a systemic business risk. Rising temperatures affect labour productivity, water availability, agricultural output, infrastructure stability and political stability. Supply chains do not operate in isolation from these pressures.
That reality raises the stakes. Framing adaptation as the “only way out” risks lowering ambition, he says. “It’s an easy way out. It’s sexier. But we cannot overlook mitigation.”
Ready for the shocks?
If adaptation is climbing the political agenda, corporate readiness for physical climate shocks remains uneven.
Ask Delbard what businesses are least prepared for, and the answer is immediate: “Natural disasters.” Floods. Droughts. Heatwaves.
Many companies, he argues, still see climate change through a narrow lens – regulation, disclosure requirements and small adjustments to their offerings – rather than as a direct physical threat to their operations. As Delbard puts it, “they view climate in terms of products” rather than ecosystems.
He argues that globalisation has deepened the problem. As companies spread operations across continents, they lost close ties to the places they depend on. Climate risk can feel distant – at least until a flood, drought, or storm brings it home.
There is also a mindset gap, Delbard adds. Resilience is often seen as the state’s responsibility. For many companies, putting in place a serious plan to anticipate and manage climate disruption is still not a core priority.
The more large companies work with their suppliers, the more influence they can have beyond their own operations.
From efficiency to resilience
Where companies are taking action, they are starting with the supply chain. “Supply chains are crucial,” Delbard notes.
After years of chasing lower costs through overseas expansion, many firms now see how exposed those long, complex chains are to climate shocks. A single extreme weather event can ripple across multiple tiers of suppliers.
One response Delbard sees is to make supply chains more regional: shorter, simpler and easier to manage. That can mean creating regional hubs or bringing some production back in-house.
He is clear that this requires a shift in mindset. Instead of focusing only on cutting costs and protecting short-term margins, companies need to ask a harder question: will this model hold up in a more volatile climate?
That means building slack into the system. Circular models – reusing materials and reducing waste – and regenerative approaches that restore natural resources are part of that shift towards durability.
According to Delbard, the hardest part is getting suppliers to move with you. Large multinationals rely on thousands of them, scattered across countries with different laws and business practices. Many are small firms running on thin margins. Asking them to change how they produce, source, or invest is not simple. It requires time, support and a clear business reason to do so.
Yet this is also where companies have the greatest leverage, Delbard argues. When a multinational changes its standards or purchasing rules, suppliers have to follow. “The more large companies work with their suppliers, the more influence they can have beyond their own operations,” he says.
Stuck in the short term
If the case for climate adaptation is clear, why does progress still feel so slow?
One of the main issues, in his view, is that many boards and shareholders still lack sufficient knowledge of climate risks. Even when a climate strategy is signed off on at the top, it can stall further down.
Managers are judged on sales, costs and quarterly results. Climate investments often come with upfront costs and long payback periods, which can make them harder to justify. Incentives do not help, Delbard adds. Chief executives typically serve limited terms, and executive pay is still largely tied to short-term financial performance.
That makes it harder to commit serious capital to projects that may not pay off for years. It also exposes a structural gap, he continues. Much of the bold climate innovation is happening in start-ups. But these companies often lack the funding and scale to grow.
“You need radical innovation from start-ups,” Delbard says. “But they often lack funding. Large companies have the capital and the ability to scale those ideas.”
Delbard argues that unless large companies back start-ups with real funding and scale, adaptation will remain slow. At the same time, he is clear that adaptation alone is not enough. Leaders must do two things at once: manage the risks already unfolding, and continue cutting emissions to limit what comes next.
The opportunity — and responsibility — lies in bridging that gap.