Deborah Câmara Batista, FGV Alumna and Climate Change Research Consultant, and Jorge Juan Soto Delgado, Professor at FGV EAESP and Director of Sustainable Development at Braskem SA, share the cases of three leading Brazilian companies to call for a move away from climate mitigation to adaption.  

Corporate Climate Adaptation: From risk awareness to strategic action by Deborah Batista and Jorge Soto. Originally published in Portuguese in GVexecutivo – FGV EAESP. With kind acknowledgements.

The climate crisis is no longer a distant threat. For companies, it’s a daily reality that disrupts supply chains, damages infrastructure, and alters market dynamics. Yet, most corporate responses still focus on mitigation — efforts to reduce greenhouse gas emissions — while overlooking the urgent need for adaptation.

Our article draws on a multiple case study of three leading Brazilian companies that have begun implementing climate adaptation strategies. It highlights the challenges, opportunities, and solutions that can guide businesses toward greater resilience in a warming world.

Why Adaptation Matters

The Intergovernmental Panel on Climate Change (IPCC) warns that adaptation is no longer optional. Climate change is already affecting rainfall patterns, temperature averages, and the frequency of extreme weather events. While mitigation remains crucial, it is insufficient to protect businesses from the escalating risks. Adaptation involves adjusting operations, infrastructure, and governance to anticipate and respond to climate impacts.

Still, most companies are slow to act. Among over 9,000 global companies reporting to the CDP in 2021, only six Brazilian firms received top scores for their adaptation efforts. The research presented here focuses on three of them, offering valuable lessons.

Four Profiles of Climate Response

Companies tend to fall into one of four categories:

• Preventive adapters, which proactively invest in infrastructure and processes to avoid losses;
• Reactive adapters, which respond only after being affected by climate events;
• Continuous adapters, which integrate adaptation into their core operations;
• Deferred adapters, which delay action, assuming low vulnerability or low exposure.

The study found that a company’s perception of risk — shaped by both scientific data and organizational culture — plays a critical role in determining its adaptation strategy.

Adaptation in Practice: From Risk to Resilience

The three case companies demonstrated different stages of maturity in adaptation. Common elements in their approach included:

• Advanced risk management frameworks, such as ERM (Enterprise Risk Management), tailored to account for climate uncertainty.
• Scenario planning that incorporates long-term climate projections.
• Collaborative governance, involving sustainability teams, operational leaders, and executive boards.
• Dual strategies that combine hard solutions (e.g., infrastructure upgrades) and soft ones (e.g., behavioral changes and stakeholder engagement).

Examples of concrete measures included improving water reuse systems, investing in predictive weather technologies, revising supply chain logistics, and shifting toward renewable energy sources — which, in some cases, led to reduced emissions as co-benefits.

Opportunities Beyond Compliance

While many companies see climate adaptation as a risk management obligation, forward-looking firms are discovering new business opportunities. These include:

• Creating new products aligned with low-carbon lifestyles;
• Entering green markets, such as renewable energy and carbon credits;
• Developing consulting services to share their adaptation expertise;
• Increasing operational efficiency and reducing costs through resource optimization.

In one case, adaptation efforts led to the development of an entirely new revenue stream, illustrating how climate action can drive innovation.

The Role of Collaboration and Governance

Adaptation does not happen in a vacuum. The research emphasizes the importance of ecosystems of collaboration, involving suppliers, regulators, civil society, and communities. The companies studied engaged in:

• Local water reuse projects in response to hydrological stress;
• Joint research and innovation partnerships;
• National and international sustainability forums, which serve as learning platforms and influence policy agendas.

However, barriers remain. These include the lack of regulatory frameworks, limited access to climate data in business-friendly formats, short-term investment horizons, and internal resistance to change. Overcoming these barriers requires:

• Participatory decision-making;
• Cross-sector knowledge exchange;
• Flexible, adaptive governance models;
• Long-term thinking across departments.

Looking Ahead: A call to action

The research concludes that adaptation must become a core element of corporate strategy — not just for compliance or resilience, but for long-term competitiveness. Companies have the potential to support public institutions, mobilize resources rapidly, and co-create systemic solutions for climate-resilient development.

Importantly, climate impacts extend beyond company walls. To truly reduce risk, firms must consider their value chains, ecosystems, and social context. They must also acknowledge that building resilience is not only a technical challenge, but a political, cultural, and ethical one.

By investing in adaptive capacity today, businesses not only safeguard their operations — they contribute to a more sustainable and equitable future for all.

Useful links:

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