Climate extremes are no longer rare or predictable. They happen more often, with greater intensity, and with far less warning. For organisations, this has shifted climate risk from a distant concern to a systemic threat that cuts across operations, finances and social license. Whether an organisation remains viable in this environment increasingly depends on its ability to withstand disruption and adapt under pressure.
For risk practitioners, this has important implications. Traditional ESG risk registers were designed to identify and record risks. That is no longer enough. They now need to test whether the organisation can respond when shocks occur, not in theory, but in practice.
The past eleven years, from 2015 to 2025, have been the warmest on record. Extreme events are now unfolding against a higher baseline of heat and instability. In June 2025, severe flooding in the Eastern Cape destroyed infrastructure, swept away vehicles and homes, and claimed more than 100 lives, displacing thousands of people. Early 2026 brought further, unprecedented flooding in Mpumalanga and Limpopo, with additional damage and loss of life. At the same time, extreme heat, drought and high winds drove devastating wildfires across parts of Europe and the Mediterranean, forcing mass evacuations and destroying hundreds of thousands of hectares. In South Africa, fires in both the Western and Eastern Cape marked the start of the new year.
These are not isolated incidents. Floods, fires and heatwaves trigger knock-on effects that quickly move beyond the initial hazard. Water supplies come under strain, workforces are disrupted, communities become unstable and insurance costs escalate. Tourism, agriculture and local economies are affected long after the immediate crisis has passed. Treating climate hazards as stand-alone risks within corporate frameworks no longer reflects reality.
Building resilience requires deliberate, forward-looking investment. It also requires organisations to confront the cost of doing nothing. Despite the growing body of climate science, adaptation measures remain underfunded in many regions. Early-warning systems, resilient infrastructure, emergency response capacity and municipal services are often weakest where the risks are greatest. This is not an ESG “nice-to-have”. It goes to fiduciary responsibility and, increasingly, to an organisation’s license to operate.
Resilience is built in multiple, interconnected ways. Physical assets need to be designed and maintained with future conditions in mind, including redundancy in critical systems such as power, water and IT. Financial planning must account for climate stress through scenario analysis, insurance and sufficient liquidity. Operations need credible continuity plans, diversified suppliers and clear protocols for workforce safety and communication. Beyond the organisation itself, resilience depends on the stability of surrounding communities, strong partnerships and the ability to prevent social disruption in the aftermath of extreme events.
The objective is not to return to an old ‘normal’ that no longer exists. It is to adapt operating models to conditions that are already changing. Risk registers that are fit for the future must reflect this shift. They should capture not only threats, but also where organisations can innovate, invest differently, strengthen governance and learn from disruption as climate volatility becomes a defining feature of the business environment.
What this means for your ESG risk register:
- The hazard landscape has shifted: extremes (such as floods, heatwaves, storm winds, wildfires) occur more often and with greater intensity.
- Rare events are no longer rare: the baseline has moved. Previous tail-end climate risks must now be treated as likely rather than improbable.
- Resilience is an equally material dimension as mitigation: exposure, vulnerability, infrastructure readiness, emergency logistics and early-warning capabilities must be assessed.
- Compound events must be incorporated: heatwave-drought-wildfire, or heavy rainfall-saturated soils-flash flooding. Risk models must reflect interacting hazards, not single events.
- Mitigation and adaptation plans must span physical, financial, operational and community resilience to ensure the organisation can withstand and recover from more frequent and severe climate shocks.
Contact: Tina Playne
