How corporates can use technology to adapt to climate change

Climate adaptation is critical for business resilience. Learn how AI, early warning systems, innovative financing & nature-based solutions help corporates manage climate risks.

July 2025

Climate change is no longer a distant threat, it’s a reality that businesses must confront. Every industry feels the strain of a warming planet, from record-breaking heatwaves to droughts that dry up Europe’s major trade rivers. In 2022 alone, extreme weather disasters caused around $200 billion in damages worldwide.

In this post, I’ll explore the growing urgency for companies to consider adaptation strategies alongside mitigation. I’ll share real-world impacts already being felt and dive into how emerging technologies like AI, modelling tools, and innovative infrastructure solutions can equip companies to face climate change.

The reality of climate risk

Let’s start with some facts. In 2024, global average temperatures surpassed 1.5°C above pre-industrial levels for the first time, a significant and worrying milestone. Why does that matter? Because above 1.5 to 2°C, the frequency and severity of climate disasters spike dramatically.

We’re already seeing the effects. The European droughts of 2022, the worst in 500 years, made major rivers like the Rhine unnavigable, halting transportation of goods such as coal, chemicals and steel. This disrupted industrial giants like BASF and even forced nuclear power plants in France to cut output due to overheated rivers.

Around 32 million people were displaced in the same year due to climate-related events such as droughts, wildfires, and flooding. If this number were the population of a country, it would be the sixth largest in the EU, right after Poland.

Why corporates struggle to build resilience

Despite the mounting evidence, many companies still struggle to invest meaningfully in climate adaptation. Why?

  • “It’s tomorrow’s problem.” Climate risks are often perceived as distant threats, making it hard to justify present-day investment.
  • Uncertain returns. Unlike mitigation (which can drive efficiency and revenue), adaptation often lacks immediate and known payoffs.
  • Lack of ownership. Few businesses have roles explicitly tasked with climate adaptation, so responsibility falls through the cracks.
  • Talent gap. There’s a shortage of people with the skills to plan and implement long-term climate adaptation strategies.
  • Difficult to prioritise between actions: With limited resources, complex decision making criteria, and an overload of data – it can be difficult to understand the impact of adaptation actions and therefore decide how to prioritise them.
  • Lack of financial instruments and investor interest. There are relatively few tailored financial tools for adaptation. Adaptation and catastrophe bonds are emerging but underdeveloped, so corporates must navigate unfamiliar financing structures, something risk-averse CFOs are reluctant to do. Also, most ESG funds focus on mitigation because of their clearer link to carbon targets, whilst adaptation is perceived to have higher risk, lower return, and is challenging to evaluate.

Financing, lack of skills, and lack of corporate incentives are intertwined and have slowed or prevented the development of climate adaptation solutions being implemented.

Technology to the rescue? Tools for climate adaptation.

Here’s the good news. Technology is rapidly reshaping how companies can prepare for climate risks. A new wave of innovations, from AI modelling to satellite imagery, is making adaptation faster, smarter, and more cost-effective.

1. Predictive modelling & earth observation

Thanks to improved computing power, we can now map risks with precision. AI-enhanced models forecast heatwaves, flooding, and wildfires at a granular level, helping companies understand and prioritise action where it matters most.

Platforms like those offered by climate tech firms can highlight regions with a high likelihood of fires or droughts, then recommend location-specific strategies, from infrastructure upgrades to emergency response planning. An example of this innovation is Kontur, a software company combining public data from satellite imagery and climate models. Their product is a map of the world with areas coloured red if they have an increased likelihood of disasters such droughts, wildfires, and floods. This can help corporates to identify risks and make trade-offs between adaptation projects, helping them make better decisions whilst saving them time. The previous approach would require consultants to do assessments for each site.

2. Monitoring & early warning systems

When it comes to climate adaptation, timing can be the difference between disruption and catastrophe. That’s where early warning systems step in. These technologies fuse climate forecasts, IoT sensors, and bespoke analytics to deliver advance notice of extreme weather, be it flooding, wildfires, or heatwaves. For example, power utilities in high-risk wildfire zones now use predictive tools to pre-emptively shut down vulnerable infrastructure. Umgrauemeio, a start-up, uses cameras and satellites to detect wildfires and advanced simulation to model its spread to help fire brigades proactively respond.

3. Drones, satellites & disaster response

Real-time earth observation tools, including drones and satellites, allow rapid damage assessments. These technologies can dramatically improve response times after a disaster and help allocate resources more effectively. In humanitarian contexts, they can be used to accelerate food and medicine delivery to disaster zones by mapping the type of damage and where relief efforts would have the greatest impact. Corporations can take a cue here for supply chain logistics.

For disasters where people have fled, such as earthquakes and floodings, social media can be used to trace population movements to send aid directly to them. Facebook’s ‘Data For Good’ service can share anonymised information to aid organisation on how Facebook users have moved post disaster.

4. Advancement in engineering

While much of the focus has been on digital solutions, a range of hardware-based innovations from across diverse engineering disciplines, are playing a critical role in climate adaptation. Many of these technologies weren’t originally developed with adaptation in mind but are now being repurposed to address emerging risks. For example, advances in gene-editing have enabled the development of crops that are more resilient to salt, pests, heat, and drought, helping safeguard agricultural productivity for both corporates and communities amid shifting land conditions. In the water sector, companies like Desolenator are creating solar-powered desalination systems with low operational costs, particularly suited to sun-rich regions. These solutions offer a lifeline for corporates reliant on water as a feedstock in areas facing increasing scarcity.

5. Nature-based solutions

Nature-based solutions leverages the use of the ecosystems to help geographical areas adapt to climate risks while delivering co-benefits for biodiversity and carbon sequestration. Restoring wetlands, planting mangroves, or reforesting degraded land can act as natural buffers against flooding, extreme heat, and drought. For example, coastal infrastructure projects are increasingly integrating mangrove belts or dune systems to absorb storm surges (mangroves reduce wave height by 66% easing erosion and flood risk). New financing models are emerging to support these efforts such as HSBC’s mangrove bond for Australian municipalities or Indonesia’s blue bond to fund sustainable marine initiatives. While the market is still maturing, corporates will increasingly have access to both a wider range of nature-based solutions and innovative mechanisms to finance them, especially as climate risks become more localised and measurable. We will discuss this further below.

6. Climate risk pricing as a stick

Interestingly, as weather models become more advanced and climate risks become more measurable, insurers and financial institutions are starting to price in risk more aggressively on all different types of assets. At CLT, we’ve seen this first-hand, recent flooding in London led to significant increases in home insurance premiums for our colleagues. For corporates, this trend means that climate risk will increasingly be factored into lending and asset financing decisions, potentially driving up the cost of capital. To avoid this, businesses will need to either mitigate or adapt to these risks. While studies consistently show that the benefits of mitigation and adaptation outweigh the costs, financing these solutions remains a challenge. Traditional lending for adaptation projects are limited and instruments such as adaptation and catastrophe bonds are still in their early stages. However, corporates that can demonstrate credible, cost-effective adaptation strategies may be able to unlock new capital sources or reduce financing costs, transforming resilience into a competitive advantage.

Proactive steps for corporates

So what can companies actually do right now? Here are five starting points:

  1. Assess asset-level risk. Use AI and climate models to map site-specific exposure to flooding, drought, heat, and storms.
  2. Assess supply-chain risks. Understand how climate risks affect supply of feedstocks (e.g. water, crops, fuels etc.) and disruption to logistics such as low-water levels in rivers.
  3. Build an adaptation roadmap. Identify which risks matter most to your business and develop targeted adaptation strategies – whether that’s infrastructure investment, supply chain reorganisation, or disaster planning.
  4. Invest in decision support systems. Adaptation is complex, no one can solve it alone. Computer systems can help make sense of the biggest risks for your business in the near and long term.
  5. Collaborate with finance. Work with insurers and investors to start gathering the right evidence required to unlock capital and investment.
  6. Embed adaptation into decision-making. Don’t treat it as a side project. Make it part of procurement, finance, operations, and long-term strategy.

Adaptation is a survival strategy

We’ve waited too long to act on climate change. Now, adaptation is no longer optional, it’s essential. For corporates, the task is to start planning for a more volatile world where resiliency becomes a competitive advantage.

The building blocks of corporate resilience already exist – from implementing advanced technologies to developing the right organisational incentives.

Do you know what climate risks will soon knock on your door and your plan to deal with them?

References

  1. World Economic Forum (2024). Innovation and Adaptation in the Climate Crisis
  2. UNHCR (2023). Climate change and displacement: the facts
  3. HM Government (2025). UK Climate Adaptation Research and Innovation Framework
  4. McKinsey Health Institute (2024). Health-related climate adaptation: Innovate and scale for local needs
  5. UNEP (2021). Adaptation Technology Taxonomy (TNA)
  6. IPPC (2018). Impacts of 1.5ºC global warming on natural and human systems

Written by

Robert Olrog

Senior Consultant